Earnings Transcript for MNTV - Q1 Fiscal Year 2021

Operator: Ladies and gentlemen, thank you for standing by. My name is Tasha and I will be your conference operator today. At this time, I would like to welcome everyone to SurveyMonkey's First Quarter of Fiscal Year 2021 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remark, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to hand the conference over to your host, Vice President of Investor Relations, Gary Fuges. Sir, please go ahead.

Gary Fuges: Thank you. Good afternoon and welcome to SurveyMonkey's first quarter 2021 earnings call. Joining me on today's call are Zander Lurie, CEO and Interim CFO; and Tom Hale President. After our prepared remarks, we'll take your questions. Prior to this call, we issued a press release and shareholder letter with our Q1 2021 financial results and related commentary. These items are posted on our Investor Relations website at investor.surveymonkey.com. Today's prepared remarks will only discuss the highlights of our Q1 financial performance and we refer you to these documents for a more detailed discussion of the income statement, balance sheet and cash flow statement. During the course of this call, management will make forward-looking statements, which are subject to various risks and uncertainties, including statements regarding 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. Finally please note that all growth rates discussed in today's prepared remarks are year-over-year unless otherwise noted. And with that I'll now turn the call over to Zander. Zander?

Zander Lurie: Thanks, Gary. Our Q1 can be summed up in one word, execution. Q1 revenue exceeded the high end of our guidance range. More importantly, we accelerated our overall leading growth indicators with 21% year-over-year growth in RPO and 23% year-over-year growth in deferred revenue. And in enterprise sales we reaccelerated back into hypergrowth across all major product categories in our new business and in renewals. Based on our strong Q1 performance and revised outlook, we are raising our full year revenue guidance. Our Q1 performance is a function of our strategic investments in product innovation and our enterprise sales go-to-market channel. Recent leadership changes are paying dividends and helping us expand our relationships with customers. We are shipping stronger products with better velocity and winning big customers. The experienced management category is healthy and our agile products deliver value. Now we are capitalizing broadly on the market opportunity, connecting more customers with the right solution whether we engage with them through our website, our sales reps or our customer success team. Many of our growth initiatives are either early in their maturity or not yet launched; our response-based pricing rollout to our installed base, our new high-velocity sales team, cross-sell initiatives and our new customer experience market research solutions. We had a great quarter and we plan to build on Q1's momentum in Q2. Our first quarter financial results were robust across the board. The press release and shareholder letter discuss the quarter in detail so I'll hit the highlights. Revenue of $102.3 million exceeded the high end of our guidance range driven by growing momentum across all product lines and go-to-market channels. RPO increased 21% and deferred revenue grew 23% year-over-year, which reflects Q1's strong broad-based new sales and renewal performance. Enterprise revenue rose 24% year-over-year or 35% excluding the impact of a large non-recurring -- in Q1 of 2020. And self-serve revenue posted its second consecutive quarter of 13% year-over-year growth. Non-GAAP operating loss of $0.6 million was in line with -- as we continued to invest to drive accelerated durable growth. And we generated $15.1 million in free cash flow and ended Q1 with $34 million in net cash. In Enterprise sales, we raised the bar on execution through the combination of our ongoing product and go-to-market investments and the prescriptive changes we outlined on our last call. We ended Q1 with more than 8,800 Enterprise customers up 29% year-over-year. We added more than 660 new enterprise logos sequentially including Cedars-Sinai, Glassdoor, Kawasaki Motors, The Economist and Tonal and we accelerated the leading indicators of enterprise sales growth significantly in the quarter well outpacing Q1 enterprise revenue growth driven by new business and renewals across all our major enterprise products. We already had a talented enterprise sales team in place and the tactical changes we discussed with you in February supercharged our sales motion. New leaders brought more rigor and the combination of solutions-based selling and our new high-velocity sales teams gave our reps greater clarity and focus resulting in more deals and higher quality deals compared to Q4 of 2020. Enterprise sales traction was broad-based. Survey use cases are gaining momentum in verticals like human resources and healthcare and additional targeted solutions are on the way. In customer experience or CX, we had a number of notable wins including The Group the UK's largest integrated digital retailer and financial services provider who chose the GetFeedback platform for its speed to value and sales force integration. Market Research the combination of our new software modules services and panel is resonating in the market. TCL Technology, a leading global consumer electronics company is using our agile market research solutions to run consumer research in over 20 countries to better understand product feature preferences and trends. Concurrently, our self-serve channel exhibited continued strength with 13% year-over-year revenue growth. Our Multiuser teams product continues to be a winner for customers and for our business model. We are improving our ability to programmatically connect self-serve customers with the right product tiers to maximum utilization. Our self-serve product and growth teams are world-class and we are confident in our ability to deliver durable growth in years to come. Our overall book of business strengthened further. Organizational domain Net Revenue Retention or NRR remained above 100% and improved sequentially. Enterprise renewal rate grew from Q4, our third consecutive quarter of improvement. And renewal rates for annual self-serve customers returned to healthier pre-COVID levels in Q1. We are also seeing an increase in the number of customers signed up for multiple products. We now have more than 500 Enterprise customers using two or more of our products up approximately 40% year-over-year. Based on Q1's performance and our outlook, we are raising our full year 2021 revenue guidance. We now expect revenue growth in the range of 17% to 19% up from our prior expectation of 16% to 18%. We continue to believe we can grow RPO faster than revenue this year. Given the efficiencies, we are driving in the cost of revenue line, we now believe non-GAAP gross margin will normalize in the low 80% range. We are maintaining the non-GAAP operating margin of 2% to 4%, as we will continue to invest to accelerate growth and we are raising our free cash flow range to $47 million to $52 million. Beyond 2021, we are confident we can further accelerate growth through continued execution. Many of our go-to-market and product initiatives are not yet fully reflected in our growth profile. In survey, beginning to ramp use case sales and high-velocity sales. We've built the foundation to increase sales efficiency by driving smaller deals to the high-velocity team and focusing our talented account executives on larger opportunities. And we're still bringing use case packages to market and fine-tuning the high-velocity motion. In CX and Market Research, it's still early days. New sales leadership and capacity are ramping and we are continuing to invest in product innovation. We have a lot of runway to scale as a challenger in CX and a true disruptor in Market Research. In enterprise expansion, we'll start migrating existing SurveyMonkey enterprise customers to the response-based pricing model we introduced to new customers in April of 2020. More broadly, our new Chief Customer Officer, Ken Ewell is partnering with our Chief Revenue Officer, John Schoenstein to execute stronger more consistent upselling and cross-selling throughout our growing base of 8,800-plus enterprise customers. In sum, Q1 was a strong quarter across the board with phenomenal enterprise sales performance 21% RPO growth, 23% deferred revenue growth, and increased revenue growth expectations for the calendar year. Our strategy is working. Our enterprise products are resonating with customers, our team is energized and we have multiple early-stage vectors that can further accelerate growth. I'll now turn the call over to my partner Tom.

Tom Hale: Thanks Zander. Q1 was an equally phenomenal quarter for innovation at SurveyMonkey. We delivered new products and features across all three of our product lines and increased our focus on our platform and partnerships to accelerate our move upmarket. In surveys, we launched our expanded Return-to-Work solution, which combines automated industry benchmarking and trend analysis to help people leaders quickly understand and act on employee needs and sentiment as businesses reopen. We're also seeing great traction in the health care vertical as organizations like Garnet Health are utilizing SurveyMonkey Enterprise HIPAA compliance add-on and Microsoft Power BI integration as their feedback collection platform. We're also on track to release our Zoom Video Communications integration. And with integrations for both Zoom and Microsoft Teams, we'll be able to power feedback within two of the market's top collaboration platforms. In Market Research, we launched two new agile solutions in April Brand Tracker and Industry Tracker that are purpose-built for marketing and business leaders conducting longitudinal research. Through a powerful combination of panel, AI-powered insights, interactive dashboards and expert services, these solutions provide continuous intelligence into shifts in market perception and competitive dynamics, instantly surfacing meaningful insights without relying on slow and costly consulting firms. Brand and Industry Tracker went from concept to general availability in only nine months, which speaks to the velocity of the team and our ability to use pre-existing elements of our platform like automated insights to power our solutions. The two new agile Market Research solutions deliver results in days not months as illustrated by Allbirds, the sustainable footwear and apparel maker and our first Brand Tracker customer. Allbirds has been a Market Research customer for years and they'll leverage the power of our new solution to run a continuous brand tracker with weekly sampling quotas replacing the static reports they received from their old agency. In Customer Experience, we're making the platform even more agile and deepening our Salesforce integration key areas of our differentiation. We're automating NPS programs for out-of-the-box time to value. We're going deeper with Salesforce embedding GetFeedback-powered survey results and CX program reports directly into the CRM experience. We're enhancing our analytics experience to quickly surface customer response trends drill down into responses and view customer sentiment. And we're enabling customers to gather feedback wherever they touch customers beyond the PC or mobile. For example, a major European bank is using GetFeedback to securely collect responses from their ATMs to better serve their customers. The result of all this? Agility. Companies can benefit from the GetFeedback platform to get their existing CX programs up and running more quickly leveraging the most important touch points, surfacing insights faster and driving actions in their prime system. The innovation across our major product lines is part of this super-cycle of investment we outlined on the last call. Our platform sits at the core of these offerings delivering the AI-powered insights that make our products so agile and we're investing here as well. We recently hired Ray Ranga from Splunk, as our new VP of Platform. Ray will lead our platform strategy to help us better leverage our AI and ML capabilities across our products to drive even more value for our customers. We expect to measure platform success in terms of customer adoption retention and expansion. This was a stellar quarter of product innovation and delivery, which continues our move upmarket. I'm so proud of and grateful for the team's hard work. I'll now turn the call back over to Zander.

Zander Lurie: Thanks Tom. Along with executing on our upmarket strategy, we continue to work in Q1 to amplify individual voices and help make our business and our communities more diverse equitable and inclusive. To raise awareness of violence against the Asian and Pacific Islander community, we've partnered with a research and policy organization AAPI Data. Our study suggests many more Asians and Pacific Islanders have experienced hate crimes and hate incidents in 2020 and 2021 than the number of reported incidents during this time. We announced a partnership with the Eva Longoria Foundation to provide Latina entrepreneurs with free resources to help their businesses succeed, including SurveyMonkey licenses and virtual training in both English and Spanish. This announcement kicks off a broader program to provide training, mentorship, resources and access to investments for underserved entrepreneurs. We also continued our work with Operation HOPE, America's largest non-profit financial inclusion organization launching the HOPE Minority Small Business Index to highlight the experience of black small business owners and entrepreneurs. We are excited to see more customers using our products to further their own DEI initiatives. For example, a top venture capital firm is using SurveyMonkey Enterprise to establish a baseline for DEI within their portfolio of companies and track performance invest in underrepresented founders and support entrepreneurs in adopting DEI best practices. Tegan and Sara the award-winning musicians and founders of the Tegan and Sara Foundation also used SurveyMonkey to create a health care survey to understand the LGBT community's experiences with the COVID-19 vaccine and elevate their concerns to policymakers and health care organizations. We are proud that our products support these initiatives, as we believe a more diverse equitable and inclusive community benefits all our stakeholders. Q1's execution reflects the impact of our products and go-to-market strategic investments and our agility to make tactical changes to improve execution against our growth goals. As a result, we are raising our full year revenue guidance range to 17% to 19% and we are confident we can grow RPO faster than revenue this year. But the first quarter is just the starting line and we are committed to building on Q1's performance throughout 2021 and beyond. I'd like to thank the incredible SurveyMonkey team for staying focused on our mission. We simply crushed it this quarter. And I keep – see the momentum we post in Q2 and beyond. Thank you, operator. We'll now take your questions.

Operator: [Operator Instructions] Your first question comes from the line of Mark Murphy with JPMorgan.

Pinjalim Bora: Hey. This is Pinjalim. Thank you guys for taking our questions, and congrats on the quarter. Seems like a pretty strong one and was surprised by the strength so quickly after all the changes you have made on the sales side. So would love to parse the strength a bit if possible on the billings and the DR and the RPO side. Where are you seeing the strength specifically? Any – did anything stand out to you in terms of products? Did the – and the other part is I guess to what extent is there an effect of deals being pushed out of last quarter that closed this quarter, or do you think the strength is more sustainable?

Zander Lurie: Yeah, it's Zander. Thank you for the question and the good words. I'm truly appreciative of the team's effort this quarter. There was absolutely strength across the board, all product categories in all geos. And the way, our business is comprised is, we just don't have very large customers there is no customer concentration. There was absolutely nothing anomalous about Q1. And frankly, the reacceleration we saw throughout the business happened stronger and faster than I had predicted. And I attribute it to some really good leadership changes we made on our go-to-market motions, really good product velocity from teams across the board. And as I said, at the top of the call it was just about excellent execution. So enterprise acceleration obviously the leading indicators here grew at a multiple of our total revenue growth, and you'll see that manifest throughout the year but RPO and deferred revenue are good signs. And then most importantly, it's the trajectory into Q2 and beyond. So we've got a ton left in the tank, when you look at the large response-based pricing initiative. We'll be rolling out to our installed base, some exciting new product deliveries that you'll see in the quarters to come. And then just the seasoned and ramping of Salesforce that continues to grow across new sales and expansion. So, really pleased with the quarter, and even more excited about Q2 and beyond.

Pinjalim Bora: Wow, interesting. Thanks for the answer. And as a follow-up Zander. At this point, in time would you say all the changes that you intended to make on the sales side, is that all over everything is in place and it's all about execution from now onwards?

Zander Lurie: I'll never say, all the changes are in place. When you look at a company of our scale around the world, we're constantly hiring new talent. We hired 160 new people in Q1 33% of whom identified as underrepresented minorities. We have a fantastic sales and customer success leadership team in place. This is a team that can run a business a multiple size of our current business. So I'm looking forward to continued acceleration. This team had higher quota attainment in the quarter, higher productivity by sales rep. And really, we believe we're at the early, early onset of a multiyear run here to accelerate growth. So I'm looking for big things from this team to come, but we'll always be adding stars in the quarters to come as well.

Tom Hale: And I'd like to add, I think there's a ton of product investment from our super-cycle that's going to help with new and expansion sales. We're seeing the success of our use case strategy with SurveyMonkey Enterprise the new feature adds for CX. We just added some other components for Salesforce today additional Market Research, software offerings and our platform and AI strategy are really taking root. So we've got great seeds in the ground. And then you add to that, the sales efforts our high-velocity sales team is just getting started. Our CX and MRX sales teams, their capacity is ramping and so is their time and seat. So we've really got a bunch of seats in the ground to give us some confidence about the sustainability of this trajectory over the course of the year.

Pinjalim Bora: Understood. Thank you.

Operator: Your next question is from the line of Chad Bennett with Craig-Hallum.

Chad Bennett: Great. Thank you for taking my question. Awesome to see the rebound in the quarter and so quickly improved execution guys. So I guess a couple of questions for me. Just in terms of the RPO growth relative to revenue growth. Is that overall revenue growth, or are you in particular pointing out enterprise revenue growth?

Zander Lurie: Well, Chad thanks for the good words. You've been following our business for a while. The Enterprise business is the area that is in hyper growth. And if you look across our portfolio, we have product market fit across Surveys Market Research and CX. Our Dublin team is thriving, our Canadian team is thriving and our Americas team really just had a stellar quarter. So the RPO growth you're going to see here as the revenue gets recognized in the quarters to come it was we are in clearly hyper growth mode as a multiple of our total revenue growth, and that's just a function of 90% of our business is subscription-based. So those – that revenue just takes a while to flow through the model. So I think you'll see in the quarters to come some – a demonstrable gap between recurring revenue growth Enterprise business the leading indicators in the business today.

Chad Bennett: And then maybe just a follow-up just on CX and MRX, and I know I understand those solutions are still relatively early. But are we seeing any meaningful impact from those solutions in RPO today? And I don't want to hold you to anything, but if we get to year-end how impactful could those solutions be to RPO?

Zander Lurie: So the – each of the MRX and CX today comprise about 10% of total revenue, but that is a backward-looking number. If you look at the heat and energy being applied to those two businesses to Tom's point the Brand Tracker and Industry Tracker that we launched inside of Market Research winning world-class technology companies like Allbirds and getting, a whole bunch of attention from Finserv CPG business services. So we're seeing bigger deals there. We're seeing an improved margin structure there given more of those – that business is now comprised of software. On CX the GetFeedback team is on fire. We saw the rebrand. They shipped new product. We shipped new product today with Salesforce. And we're winning deals expanding deals from companies like Carrefour and The Very Group and Kawasaki and Antonella [ph] and we're just – we're winning world-class customers. So it's all about more market awareness and more sales execution. So you can hold me to anything and my hope is you will put accountability for a higher percentage of RPO from CX and Market Research when we get to the end of the year.

Chad Bennett: Awesome. Sounds good. Nice job. Thanks.

Zander Lurie: Thanks, Chad.

Operator: Your next question is from the line of Daniel Bartus with Bank of America.

Daniel Bartus: Great. Hey, guys. Thanks for taking the questions. So it's clear you guys had a nice improvement in the execution. Curious just about the CX market health in general though too. We've seen some mixed things out there. But 2021 still seems like it's a year where CX is set to be a big theme. So just what are you guys seeing in terms of the willingness and urgency for customers to spend in this category just generally?

Zander Lurie: Yes. I'll kick it off and maybe Tom can dig deeper in some of the points. I think CX is one of the most interesting categories in all of software. And if you think about this broadly defined experience management category, this is what companies are asking us for today. They want to do better by their customers. It's why people came to SurveyMonkey 10, 15 years ago to ask questions of their stakeholders to do better by them, to deliver better products, to meet them where they are, better campaigns, better pricing, better packaging. And that density of usage on SurveyMonkey and SurveyMonkey Enterprise is what led us into CX. We made two pivotal acquisitions that we're super proud of in 2019 in Usabilla and GetFeedback. Today, Craig Shull from GetFeedback is leading that team with the CEO of Usabilla Marc van Agteren on product. And we now have a purpose-built software solution for customers across financial services, CPG, quick-serve restaurants we're doing really well in, consulting healthcare, government you name it. And that purpose-built solution which really helps people inside of all kinds of companies respond to the needs of their customers and then integrate inside of Salesforce to take the right action, we believe this is a massive market. There are going to be two winners in this category and we are going to be one of them. Tom, what would you add there?

Tom Hale: Dan, the one thing I would add is that for companies that haven't really invested behind CX, they feel the urgency. And COVID and the shift of digital transformation has driven them to say, we've got to get after this quickly and we play really, really well there because of our agile positioning and our time to solution value. On the other side, you've got folks who have been doing it for a little while and COVID has disrupted them and shifted them more towards digital; meaning they're going to be having more of their interactions with their customers via their website or their app. And in that transformation, our value proposition of both agility and digital and tie into Salesforce their CRM of record is such a powerful selling proposition. So I think to answer your question broadly. I think there is a tailwind around CRM-enabled CX because of digital transformation and because of COVID. And I think we're really well positioned to sort of take the lead on that because of the emphasis on digital and the emphasis on Salesforce that's part of our value proposition.

Zander Lurie: And as our CMO Leela Srinivasan would say, digital transformation not going back. It's not like we're still on face masks or donut delivery. There's nothing COVID-related here other than this digital transformation, the CX transformation. It's stimulating companies across the world in every different kind of industry to embrace software to get to know their customers better to do right by their customers. So we have no fear that a return to office and a return to safety and health is somehow going to take people back to the cave world of paper and pen.

Daniel Bartus: Yes. Yes, I agree. And that's all great to hear and really helpful. Just as a quick follow-up kind of continue with the CX theme here. Just who are you guys up against mostly for GetFeedback? Are you up against Salesforce Surveys? And maybe you can just touch on some of the key differentiation between them?

Zander Lurie: Sure. So we have great partnerships with Microsoft, Salesforce a burgeoning one with ServiceNow. All of these companies have some kind of forms product. Don't kid yourself, this is not a competitive CX product. So we see great partnership opportunities to help build product and meet the needs of their customers. They see great opportunity in referring customers to us. Those customers then become stickier cloud customers with higher net revenue retention inside of these platforms. So the competitive landscape for us today is first and foremost, ourselves. We're trying to move customers off of a subscription product or the enterprise product and move them up as we see greater opportunities to deliver value to our customers. We're bumping in Qualtrics, an increasing amount. So we used to see Qualtrics very infrequently. Today, we're being invited more and more to RFPs that use Qualtrics and we are beating them time and again for customers that are prioritizing agility, speed to value, integrations with their systems of record and price disruption. So we really believe that Qualtrics and SurveyMonkey will be the two market leaders here in CX, but there is so much greenfield for both of us to thrive.

Tom Hale: It's also great to see the breadth of customers that we adopt. And we have great customers like Crocs, YETI, Puma, Carrefour, Headspace a lot of technology companies. But like credit card company leading European utility, major energy company in the UK, large banks in Europe, major sandwich chain, global pizza chain. Like we have big customers who are really seeing the value of digital and the importance of their app and their web experience because that's how they have to interact with customers in a COVID world. So we're in a really great position, a great posture here.

Zander Lurie: Tom said, there's something really attractive too about the global nature of this product category. There's nothing inherently US-centric about this. We hired a sales leader out of Oracle, I mean Graham Douglas out to lead our CX practice in Europe. And the deals that he and the team are bringing to the fore, it just shows you the size and scale and multiyear components of these deals where the most broad-based European customers in every category are really looking to embrace software to be smarter. And they're not just tech companies. As Tom said they're across the S&P 500 kind of landscape.

Daniel Bartus: Great. Thanks for all the colors, guys. Appreciate it.

Zander Lurie: Thank you. Appreciate the question.

Operator: Your next question comes from the line of Ryan MacDonald with Needham.

Tom Hale: Hi, Ryan.

Zander Lurie: Hi, Ryan.

Ryan MacDonald: Hi. Thanks for taking my question. Congrats on a solid quarter here. Really wanted to understand a bit more on the multi-product success that you're having. Obviously, some really healthy growth there. But would love to hear what products customers are typically packaging together and how this perhaps opens up the opportunity for CX and MRX to be more material within the survey customer base?

Zander Lurie: Yes, it's a great question. Our heritage was in surveys. What started as an online product generating transactions just over the web has really morphed into a very fast-growing enterprise SaaS business. But the reason we are in Market Research and the reason we are in CX is because those were the two most valuable use cases on SurveyMonkey. That led us down the path to really build purpose-built solutions, put GMs and sales leaders in charge of those businesses. And we are seeing just a terrific market category for both of those businesses. So you heard on the call 500 of our 8800 Enterprise customers today are buying two or more products. That's 40% growth year-over-year. And as we mentioned Ken Ewell, our new Chief Customer Officer just bring the whole other level of rigor, gravitas expertise to how we're showing up in market. So he's really partnered with our Chief Revenue Officer John Schoenstein to just showcase the full arsenal of products we have to customers. We are super early here. But in a world where the word platform is arguably overused to attribute strength to what a company might be offering, we believe we have really valuable solutions and the opportunity to land and then expand and deliver more value to customers we think is going to drive net revenue retention, help us continue to reaccelerate growth and be a meaningful driver as we showcase customers more of those products that Tom's team is building.

Ryan MacDonald: Excellent. That's super helpful. And as a follow-up. When we think about the shift to response-based pricing, I know you talked about this that's going to be really launching materially in June within the existing base. But how are you thinking about incentivization structures to try to drive some of that shift maybe more in the near-term than longer-term? Thanks.

Zander Lurie: So, we take a super customer-centric view here. We've been in the market with what we call seats and completes which is our response-based pricing paper for Enterprise customers since last April. So, just over a year, we signed nearly 2,000 customers -- new customers onto this model. And we're now beginning this month going back to our installed base of over 5,000 SurveyMonkey Enterprise customers and introducing the new model. So, we believe we've got a ton of new value to showcase in products and customers are super familiar with this model that is consumption-based and the more value we deliver the more we get paid. And again, Ken Ewell's team will be overseeing this move to this new paper. So, we're going to do a very customer-centric approach and work with our customers. And I believe we're going to be very successful when we report out in the quarters to come as we make that transition.

Ryan MacDonald: Thanks very much.

Operator: Your next question is from the line of Brian Fitzgerald with Wells Fargo.

Brian Fitzgerald: I wanted to ask about on CX and what we're calling a shift to social shopping and shoppable ad format within social spheres. Are you seeing any broader shifts in how clients are deploying or utilizing CX to cover that flank? Maybe it's just simply more of what you're already talking about. It's showing up in logo expansion and more in-depth product usage. But I want to know if there's any wrinkle to yes, they're specifically using this in this shoppable social regime.

Zander Lurie: Tom, you want to take that one?

Tom Hale: Yes, why don't I tackle that one? I think the answer is broadly yes. I think the shift towards e-commerce obviously driven by the pandemic. What you see though is e-commerce has different levels. You have sort of chats along the path of a checkout. If someone gets caught or has a question you have post-transaction feedback. You have a web feedback if someone either abandoned the checkout or clicks outside of the browser. And those are all things that we do today. And what you're seeing though is where we're really stretching this is taking it into that -- into your CRM instance so that you can have automations that trigger off on the back of that. So, should someone get all the way to the end of their checkout and then abandon that might be something you might want to record in Salesforce and then take action on because you've recorded that event against that specific customer. And I think that's really where our kind of sophistication in terms of tying back to CRM is really critical and probably on the leading edge of what people can do on the e-commerce front.

Brian Fitzgerald: And then maybe one follow-on I had was just on the new GetFeedback features. Wondering if you can maybe contextualize. Do you think you've fully closed any remaining feature gaps there -- meaningful feature gaps versus peers? Maybe if you could talk about upcoming priorities in terms of -- from a product standpoint there. Thanks.

Zander Lurie: Tom, you're still there? So, I think we might have lost Tom. This could be a product where we're just going to continue to enhance the nature of the collection mechanisms. And so right now we're very strong on web, on app, in Salesforce expanding to ATMs. We have new collection mechanisms coming. Really, it's about that action player as Tom mentioned is how do you help customers integrate this into their system of record to take feedback to then take that right action? And so whole bunch of different data that we're integrating to showcase for customers. But this is going to be a product that just continues to get better and better. And AI and machine learning are going to be at the heart of everything you do. How do you take a bunch of unstructured data as well as structured data to deliver outcomes to the person who is tasked with taking the action?

Tom Hale: And our goal is always around agility and tying back to CRM as a system of record. So, for example, we've got a program builder that we just introduced which enables someone to build a sequence of steps and events in a kind of WYSIWYG drag and drop way that actually builds the program for them and makes recommendations for them. And then today we introduced a whole new Salesforce app inside of Salesforce that allows you to see the data appearing in the Salesforce UI as part of an app and that will be shipping in June. And as we look to the second half of the year, I think there are places where we're going to continue to differentiate around text-based analytics, around surfacing themes out of that -- those text feedback that people give. And then as Zander said, the actions and automations layer, that's really where the critical value comes in.

Brian Fitzgerald: Thanks Zander and thanks Tom. Appreciate it.

Zander Lurie: Thanks for your question.

Operator: And your next question is from the line of Parker Lane with Stifel.

Parker Lane: Noticed that you highlighted the Zoom integration and I think you had an existing Teams integration. As we think about those two integrations obviously drives a lot of value for your existing customers of survey. But in terms of monetization is there anything we should be aware of there? Is it purely on the response-based pricing front, or is it more so just the customer success that you mentioned before?

Tom Hale: Yes. This is Tom and thanks for the question, Parker. The Zoom integration and Teams integration serves two purposes in our strategy. One is that it brings top of funnel because obviously those two platforms see a ton of usage and so being kind of present in those ecosystems is really great for us. But as a practical matter it's also a great way for our CSMs and our sales reps to deliver kind of organizational and enterprise value that's differentiates. So, in some sense being able to say, listen this is how you work in your team's environment and how you gather feedback from your employees or from your workers, that's part of the value proposition that helps us sell and close more effectively.

Zander Lurie: I just want to -- I want to give a shout-out to the team internally that's working on this integration. We had the good fortune of Eric Yuan, the CEO of Zoom and probably the CEO of the Year in 2020 come on and speak in front of our whole company and talk about how important the SurveyMonkey integration could be to help their customers get feedback they need at the end of session. So, we think we're taking a really innovative approach and can't wait to show the market the findings in Q2.

Parker Lane: Got it. And then, I think it's a couple of quarters now since you launched the new GetFeedback platform. As we think about those customers that have come up on this renewal cycle since that's been launched, have they been grandfathered into this new solution, or for them to get some of these new platform features do they actually have to pay somewhat of an upsell from their existing Usabilla or GetFeedback licenses that they had purchased before that was launched?

Zander Lurie: Tom?

Tom Hale: I think -- yes, thanks. I think the answer broadly speaking is, when they add digital, meaning to collect through their app or through their website or through e-mail, they are paying to expand the footprint of their CX solution. And conversely, if they were a direct -- a digital customer and they want to add direct, they're going to pay. So ultimately, when they buy up to the platform, it is an ACV expansion. We also see expansion within the platform as they add capabilities or buy more capacity. So, we do have expansion, and we've seen a fair amount of good expansion over the course of the last year from customers. I can think of one big network equipment provider who signed up for a three-year deal. And it was a massive expansion because they decided to just take it across multiple parts of their business as opposed to the one where they had started. So, yes, we see a good opportunity for expansion with GetFeedback. And of course, those customers are very, very sticky.

Zander Lurie: We have a Slack channel internally dedicated to posting the big wins of the day. And one of the major tech companies that's reporting this afternoon actually just renewed and upgraded their GetFeedback instance. So, as Tom said, you can grow ACV by expanding geographies which we didn't care for. You can be adding channels web digital Salesforce, et cetera or you're just driving more consumption in the consumption-based sales. So, we think that the gross and net revenue retention for GetFeedback, in particular will grow given the power of this product and frankly, just a better more mature sales team.

Parker Lane: Thanks. Appreciate the color and great quarter.

Zander Lurie: Thank you for the questions.

Operator: [Operator Instructions] Our next question is from the line of Brett Knoblauch with Berenberg Capital.

Zander Lurie: Hey, Brett.

Brett Knoblauch: Hi. Thanks for taking my question. Maybe just on the Enterprise side of the business. As growth decelerated a bit this quarter, is that due to, I guess, tough comps? And how should we think about the cadence of that growth going forward? Because it seems like all the leading indicators suggest that we should see a reacceleration there.

Zander Lurie: Yes. Brett, let me just disabuse you of any notion that there was decel. This is the best quarter we've ever had. So, we had reacceleration across all key indicators highlighted by just really hypergrowth in enterprise, which you will see manifest in rev rec in the quarters to come. So, obviously revenue in a business like ours that's dominated by subscription, it takes a bit to turn the ship. But the leading indicators here were fantastic across all product categories all geos. And fortunately, we've got that trajectory continuing in Q2 and gave us confidence to raise our overall year-end outlook for revenue given what we have in terms of new product pricing and sales ramp capacity.

Brett Knoblauch: Perfect. That's very helpful. And then, maybe just a follow-up on your comment where you said, you think you guys and Qualtrics will be the two leaders in the CX space. Where does Medallia fit in that? Do you guys -- do you view you and Qualtrics as having an advantage over Medallia? And if so, I guess what would that advantage be?

Zander Lurie: I could talk about our advantages as long as you have in terms of product velocity, speed to value, integration with your systems of record, customer footprint, price disruption. We've just got a super talented team that is growing our business. I've got a lot of respect for Qualtrics. It's a formidable product offering. When we come up against them, we win our fair share. So, I think the two of us are going to go out and take a ton of market share. And as far as the other player, I'll just leave it at that.

Brett Knoblauch: Understood. Thanks so much. Appreciate that.

Zander Lurie: Thanks for your question.

Operator: At this time, ladies and gentlemen, there are no further questions. And as there appears to be no further questions in queue, I'd like to turn the call back over to CEO, Zander Lurie for closing remarks. Sir, please go ahead.

Zander Lurie: Well, thank you, operator, appreciate your time today. And thank you all for joining us. We're super excited to build on the momentum we had in Q1, and we look forward to connecting with you at virtual conferences over the next few weeks. We'll be at JPMorgan and Needham, Craig-Hallum and BAML. And hopefully, we'll be able to see you in person, in actual proximate rooms together and shaking hands to grab a meal and talk more about the health and trajectory of SurveyMonkey. So, thank you to all the great employees that made this quarter possible. Thank you to our shareholders for your support and to the research analysts for your time today. Stay healthy my friends. Take care.

Operator: This concludes today's conference call. You may now disconnect.