Q2 2021 Momentive Global Inc Earnings Call

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 momentum second quarter of fiscal year 2021earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like.

Ask a question during this time simply press star followed by the number 1 on your telephone keypad. If he would like to resolve your question press the pound key.

Thank you all know like to turn the conference over to your host Vice President of Investor Relations, Gary Fujis. Sir. Please go ahead.

Thank you good afternoon, and welcome to momentum Global second quarter 2021 earnings call. Joining me on the call today are Zander Lurie, CEO, Tom Hill, President and Justin Colombia, 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.

Web site at Investor day momentum for AI.

During the course of this call management will make forward looking statements, which are subject to various risks and uncertainties, including statements relating to our strategy investments revenue operating margin and cash flow actual results may differ materially from the results predicted and reported results should not be considered an indication of future performance for discussion of the risks and uncertainties related to our business is contained in our filings with the securities and exchange.

And in particular in the section titled 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. A reconciliation of GAAP to non-GAAP results may be found on our earnings release and share.

A holder letter, which are furnished with our 8-K filed today with the SEC.

It may also be found on our IR website with that I'll turn the call over to Sandra.

Thank you Gary and thank you all for joining US today I'd also like to welcome Justin called me on New CFO I'm thrilled with the Johnson 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 momentum the agile experienced management company the move aligns our corporate position with the breadth of our agile experienced management solutions for the enterprise.

Well the survey Monkey brand is synonymous with agile surveys we've evolved significantly over the last few years as we've moved upmarket.

Our enterprise solutions are broader and deeper our go to market reach is greater and more diversified the time was right to rebrand and telling them expand the story of how we're helping 9400 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 on free cash flow with solid non-GAAP operating margin performance for first half.

Sets us up for continued strength in the second half for the year as illustrated by our updated full year revenue guidance more.

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're at the starting line without 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.

Survey Monkey enterprise get feedback and our market research solutions or the product portfolio that underpin our 5 new experienced management solution categories.

We're getting insights Brandon sites employee experience customer experience and product experience.

This new positioning is aligned with the solutions based selling evolution, we've discussed on our prior calls.

And our core principles are consistent speed and agility.

And AI powered platform that improves feedback quality and services insights quickly across our products and our 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 survey monkey product brand and the team nailed it.

It's 1 of our larger customers told us our new brand is quote more compelling more competitive more professional and more innovative this was 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.

For Q2 enterprise sales revenue grew 33 per cent year over year as we continued to attract new customers across diverse industries and use cases.

Increased sales productivity and improve retention rates.

We ended the quarter with 9400 enterprise customers up 30% year over year.

We added 550, new enterprise logos sequentially, including NBC, Universal 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 with growth again, increasing faster than enterprise revenue.

Sales force 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 value is north of 25 per cent relative to our legacy seats only price.

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 per cent.

Further enterprise customer renewal rates remained strong improving sequentially for the fourth consecutive quarter as customers continued to see the value in our solutions.

We have a large untapped opportunity to expand our relationships with existing enterprise customers. We are focused on 2 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 to work to migrate existing enterprise survey customers tourists seats and completes response baseball.

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 ACB growth.

On the cross selling front, we have significant upside.

Just over 550 enterprises only about 5 per cent of our enterprise customer base use more than 1 of our products, which illustrates the potential we have within our existing customer base.

To help accelerate our expansion strategy momentous former survey sales executive Linda Campbell has been named our new SVP of customer success reporting to chief customer Officer, Kenya.

Linda brings a wealth of experience and expertise to her new role, which we believe will help us 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 were confident expansion will become an increasingly important long term growth driver.

And Seltzer Q2 revenue growth accelerate to 15 per cent year over year. The team's 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 our retention rates are demonstrably higher than our individual subscription package for them.

Teams subscribers give us an early indicator of organizations that may become enterprise customers.

Based on our broad based execution in the first half for 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.

What's the right momentum solution.

Experienced management category is healthy and we are well positioned to capitalize on the market opportunity.

2021 is shaping up to be a great first chapter in our new momentum story.

I'll now turn the call over to Tom.

Thanks, Andrew this was another stellar quarter of product delivery as part of this year's Super cycle of growth investment to support our agile experienced management solutions are innovating quickly across our supporting products and underlying platform to help our customers Act with even greater agility.

Our good feedback customer experience solution is more deeply integrated with Salesforce, where now enriching sales force data with feedback from digital consumer touch points and our new App makes it easy to create sales force dashboards. So the CX team can share customer insights more broadly within their organizations customer system of record.

And our new program builder enables CX teams to build launch and manage relational M. P. S programs for the push of a button. It was rewarding to see get feedback recently named a category leader in feedback analytics and experience management in G to crowds grid reports for summer 'twenty 'twenty 1.

Turning to market research is 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 survey monkey enterprise in meeting feedback integration with zoom built to deliver actionable insights for the <unk>.

Meeting experience.

We're focused on innovation that helps to tailor our offerings to our customers specific needs. We now offer over 40 solutions spanning 5 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 survey monkey enterprise to gain deeper insights into their member experience, our enhanced user management HIPAA compliance and AI powered survey monkey genius features deliver high quality data, enabling crossover to make better decisions and service for their members.

Fortune 100 financial services company Stone ex chose our get feedback customer experience solution and a matter of weeks stone ex was gaining insights into customer sentiment, which allowed them to make business decisions based on what they describe as powerful yet easy to consume data and insights.

Finally plant based food alternative company eat just used momentum to discover that it's 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 appeal to both begins and meat eaters expanding their target market.

For more customer examples like how up work chose our employee experience and customer experience solutions or how Casey's added market research for their enterprise survey relationship to gain customer insights across their 2300, 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 on topic categorization and delivers recommendations about users brands and products. These enabled 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 new.

MS. Examples for AI bias across multiple industries, and we seek to be a leader in redefining AI, we built a diverse team and we're applying our D. I principles to deliver AI powered insights that enable our customers to better shape whats next for their stakeholders.

To thank the team for its relentless focus on our deliverables as we launched our new brand. We're excited to be engaging customers has 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 onto 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 person.

Of total revenue compared to 28 per cent 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 tailwind from pricing and packaging refinements.

Deferred revenue increased 24 per cent to approximately $197.3 million for.

Remaining performance obligations or our P O, which is the sum of deferred revenue and backlog rose 24 per cent 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 per cent 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 per cent compared to 2.5 per cent in Q2, 'twenty 'twenty, 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 per cent compared to 24 per cent in Q2, 2020, and free cash flow margin was 22 per cent 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 look into future periods based on Q2's performance and our outlook, we're updating our full year 2021 revenue guidance for Q.

3 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 per cent.

For the full year 2021 we now expect revenue in the range of $443 million to $447 million. Our revenue guidance assumes that our enterprise revenue growth rate will be in the thirties. As stated previously and we continue to expect reported year over year enterprise revenue growth will accelerate throughout the remainder of.

The year on.

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, 2020, 1 as we focus on positioning future pricing and packaging are assignments for 2020.2 and beyond.

We expect non-GAAP gross margin will be in the low 80 per cent range consistent with recent performance and driven by continued efficiencies in 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 on full year 'twenty 'twenty..1 as noted earlier, our investment priorities remain focused on strengthening our product differentiation and prudently advancing our go to market.

Abilities 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 million to $52 million now I'll turn the call back over to Zander. Thanks Joseph.

We launched momentum with 3 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 on our partners. We believe this is good for our business and there is strong evidence that supports our point of view.

Board ready a non-profit 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 D. E. I work focuses on our hiring practices in Q2.42 per cent of our hires identified as women and 27 per cent identified as black Black next indigenous and or mixed race.

We're also helping more customers use our solutions to shape their own dei policies.

<unk> 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 lock day momentum powered research project in partnership with the nonprofit I need diverse games.

Our diversity on social impact team, providing consulting to ensure the study included D E on.

And survey of best practices and that the work took on an intersection of loans.

We've helped other customers like Gen Con and in the coming weeks, we plan to announce a robust E M solutions to help them anymore.

Virginia, our agile products expertise and leadership experience will soon launch a D I 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. Thank you, we'll now take your questions.

At this time I would like to remind everyone in order to ask a question. Please press Star then the number 1 on your telephone keypad.

Yeah.

First question comes from the line of Mark Murphy from J P. Morgan you were not alive.

Oh, great Hey.

Zander and Tom and Justin.

Just on great to meet you in it.

It seems like a good quarter, great to see the organic revenue acceleration Zehnder..1 question for you I mean, we have recently seen 1 of your competitors make kind of a move into social listening or speech to text analysis I guess it was social be it on a call center data etcetera do you see momentum expand on a similar way.

To help customers kind of incorporate third party social data into the experience management framework.

There's a theres 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 road map, 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 we've got an ambitious road map.

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 on that we think the collection of sentiment data and opinion data from the people who use for there to serve your customers. Your employees is a massive market and while we understand the opportunity to integrate third party.

M call center or other sources of data that you can pipe into the into our platform. We think we're going after a really big market. So you know there are ancillary opportunities you know folks.

Use of our data in other systems of record. So there are opportunities to complement or supplement our data with other listening.

But I'm not we're not hurrying into that market anytime soon.

Understood no.

And 1 follow up on the restaurants based pricing.

Yeah, I think you said.

Youre getting enterprise survey a customer who's now starting in me 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 on like the 25 per cent of I think you've talked about and when can we as investors see that impact on the on the P&L do you think it'll take for our quarters are on board for that he used to kind of move over to response.

Yeah.

Yeah, I think it's important if you look at the 9400 customers in our enterprise base.

The majority of them are still service customers, but disproportionately the impact of our CX customers in market research customers that demonstrably higher AC V's, you're you're seeing the impact and how that accelerating enterprise revenue will continue its important to remember the CX and market research business is purely consumption base the larger the deployment at the bigger the customer.

More they're using the 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. So we are going back to the several thousand installed base, who bought before April of 2020 on the seats only model and I think you can imagine it's going to be a smooth trend.

And 2 as they come up for renewal there'll be migrating to the new paper you will not see the same 25 per cent ACB 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 our product suite, we want them to continue to enjoy a value and we don't want them to feel like to M..2.

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.

Understood. Thank you so much.

Thank you.

Next question comes from the line of Chad Bennett from Craig Hallum. Your line is now open.

Great. Thanks for taking my questions nice job on the quarter. So just in term zander in terms of of or Justin for that matter in terms of the commentary regarding our enterprise growth acceleration in the second half if if if we think about the drivers there whether I think you just touched on touched on <unk>.

Sponsor based pricing, but whether its CX and market research product penetration with bigger AC vs or just you know the leadership changes you've made on the go to market side or cross sell up sell what what would be the top 2 or 3 drivers to that that enterprise growth acceleration as you see them today.

Chad you've been around us for a while you sound like Youre, giving Gary a run for its money on I R is a multitude of factors. It is a really really strong leadership team in place, bringing on can you our chief customer officer, Linda Campbell moving over to be at 3 P. M customer success is huge for expansion.

And up sell John Schoen signed it just continues to bring on a higher and higher.

Quality of sales executive who these folks know how to build pipeline driving ACB as you saw the move we did on high velocity sales really with Tom Murdock is helping bring in these lower M. A C V deals, but in a much faster time frame and then freeing up aes to chase the bigger opportunities.

Super cycle of investments Tom team has made this year on the products, where you can give us a ton of confidence the market research team is killing it with you know.

Our brand tracker M concept testing and they've got new product coming out CX is made a bunch of new advancements with sales force 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 of those are contributing.

<unk> acceleration and enterprise and we should be in hyper growth mode for years to come given the size of the opportunity got it journey from Justin Yep, sorry, Chad. This is Justin the the way you can think about that from a metric standpoint, we have seen continued productivity increases quarter over quarter on the AE side of the world when customers.

Our products. They are renewing are they renewing at higher levels, 10th straight quarter of organizational domain net retention rate above 100 per cent 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 1 product. So we have about 550 customers and our 9400.

Customer enterprise base, who are using more than 1 product and that's only 5%. So there's a lot of Ah theres 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 1 quick follow up for me just on the 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 at 550 was see extra 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 over quarter from M. Rx in CX. So.

We said 6 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 3 of the product categories with the new solutions, we have on market.

Got it thanks much.

Thanks, Jeff.

Next question comes from the line of Daniel Bartus from Bank Bank of America. Your line is now open.

Great Hey, guys. Thanks for taking the questions here first wanted to ask about employee experience. It certainly seems like it's becoming.

We're top of mind for all organizations kind of struggling with retaining talent through this pandemic have you guys seen any uptick in E X and or are you seeing any momentum building for E X in the second half here.

Yeah. It's a great question I'm sure BMO is facing the same challenges that all of the other big Bangs for Big Real estate footprints are facing you know our chief people officer here, but you can't Jerry her team has done an extraordinary job working with our employee base and listening and user surveys and the benchmarks and talking to other Chr rose throughout the.

Industry and you know the saying over like the Delta variant is offering a whole new.

M set of risks we've pushed back our office opening to January of 2022, and you know, we're evaluating and making sure we prioritize the health and safety of our employees.

The employee experience is number 1 or number 2 consistently and has been since the pandemic on our survey platform. So our G. M. A survey Samantha Boston Buffed and 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 <unk>.

Survey monkey to better understand employee engagement employee experience et cetera, as we mentioned in the prepared remarks, we are launching a <unk> solution, which incorporates a lot of what has been so challenging throughout COVID-19 and really thinking about all the populations. We're here to serve on the difference between remote hybrid coming in person and how the.

The future of work is changing the future of coming to the office and how 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 the 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 is mine.

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 <unk>.

Employee related matters.

Nice nice yeah, I agree and that's really helpful. Just shifting over to the CX side of things out of your 9400 enterprise customers. How many have your CX product and certainly it 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.

Sense of how much of that is greenfield opportunity for CX for since you guys, having to go in and displace a competing product there.

Oh, I mean, Tom can elaborate on this but the the greenfield opportunity for CX is so big.

Every other SaaS CEO I talked to it's this great digital transformation, which has been hyped. 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 non-profit large enterprise if you're in the auto vertical CPG fin serve every company's app and website is the front door for their customers and so you know 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 sculptrix and momentum collectively have less than 30000 enterprise customers and a small majority of those across our 2 businesses are in the CX Arena you have to think that 50% of sales force is 300000 enterprise customers are going to be buying enterprise software in the next 5 years. So it is.

Greenfield throughout not to say, we don't display Sculptrix, we just popped them out of up work, who is now get feedback customer and we're super excited that up work 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 the Baltics, we often win when we do but the vast majority of customers. We're pursuing our greenfield and frankly are often survey monkey customers, who have an opportunity to move up to our purpose built solutions.

The only thing I'd add there Dan is that for us where a customer has an investment in sales force and makes that part of their business process for supporting or selling or marketing to customers. We have an unfair advantage because of that that's our strategy. Most of those opportunities are focusing on customers who are also.

Interested in being agile in their solution they want to move quickly and that's generally someone who has some kind of CX solution, but maybe it's not the most mature or invested in CX. So that's really where we compete and win and that's where that's where we target. Our efforts. There are some industry vertical overlay as well you know we don't tend to go after or verticals that have been long invest.

In CX, we go out for verticals like emerging companies up works. Great example of that where there are you know.

Moving quickly moving with speed wanted to understand their customer, making agile decisions on the back of their customer experience platform and that's why we want.

I appreciate it guys they control the color.

Thanks, Dan.

Again, if you would like to ask a question. Please press star 1 on your telephone.

Thanks, 1 on acute is Ryan Mcdonald from New Tam for your line is now open.

Yeah. Good afternoon, everyone. Thanks for taking my questions on a congrats on a great quarter.

And are you really focused on emphasized on the cross sell opportunity and sort of the increased focus there and obviously, making some changes internally to really step up.

The investment there can you just talk about where maybe some of the low hanging fruit fruit lies 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 sell.

Yeah. So if you look at our base of 9400 enterprise customers. You know we've been growing that at a clip of 5 or 600 per quarter and obviously new logo acquisition is critical that's why we've staffed up and built up a great account executive team in BD ours, and STR is to support them.

But we don't have to get to 100000 enterprise customers anytime soon the ACB expansion opportunities via upsell and cross sell for US are huge and we have a lot of world class logos in a lot of fortune 1000 logos.

In our installed base and today they are using our products often in a very narrow.

The sector, whether that's a geography or a division or a seat deployment and so part of the big opportunity with momentum in 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 ups on cross sell motion and so for for years now.

We've had really good net revenue retention not necessarily world class, but very good bye just renewing a product that people love the focus over the next few years via there's really.

World Class team, we've recruited is to dive deeper into cross selling upsell and so it's you know if you look at survey Monkey and the 5000 plus survey Monkey enterprise customers, we have Austin the use cases are.

Are directly in line with the new products, we offer and so many folks are doing market research on survey monkey. They are they are measuring customer experience on several months. We now have much better purpose built software solutions at demonstrably higher ACB is 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 Jeff.

I mentioned 5 per cent of our customers are now buying 2 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 well move on.

Route.

Sorry go ahead on let me just jump in on on the low hanging fruit from some of the most low hanging fruit is response based pricing right. That's where we're actually just seeing usage driving upsell and you know 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 other ones are if you're a CX solution.

Can expand from collecting data on our website to mobile to deter apps M. All the way through I do this I can think of 1 big customer in the security space.

<unk> expanded along their CX strategy, along that those 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 where survey monkey and that's what you think of US who think of US as momentum a digital solutions company that 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 expansion.

Excellent and then you know when you look at the logos you added in during the quarter are within enterprise, obviously from some very notable big names there.

To the extent that within that segment are 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 we are the deal sizes, you won't get materially larger or are you seeing it more at that low end of the market for CX.

Thanks.

No I mean, we're early enough that we're you know we're focusing on the TAC Mcafee was big CX when looking at technology looking at.

Start ups frankly ones that are super focused on customer experiences is obviously it is a natural place to start. So if you have a product in a hyper competitive environment, where pricing matters, where customer service matters, where M. P. S. You know it was 1 of your old cars. That's tailor made for our sales team Tech M. Finn.

Serve CPG direct to consumer.

But even if it extends further been Tom Tom used. The example last quarter think of car likes was.

But there was a company that was using it for measuring the quality of their on boarding process and how important. It was for you know 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 when 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.

Excellent. Thank you very much.

Yeah.

Your next question comes from the line of Parker Lane from Stifel. Your line is now open.

Yeah, Hi, Thanks for taking my questions of experienced management has obviously been a hot topic and a big priority of investment for organizations across different verticals more recently, when you think about where the budgets coming from how does that compare to across the different categories like customer experience product experience is it very different across all of those in.

Is it more manual processes that use the organization's displacing or theres. Some technology enabled activities that they're sort of up upskilling when they take on a platform like momentum.

Well I mean, I think the 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.

N L. M has a bigger budget today, because the CEO and CFO cared deeply about the customers about their their employees experience and reputation and glassdoor rating and attrition levels.

How they're using automation on Jeff.

I wanted to jump in here, but clearly there's a whole lot of SaaS businesses that are helping.

As our agencies, helping customers measure the efficacy and ROI of their spend.

Yeah, absolutely I agree with its interest pointing the way that I would think about it is you know, let's 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, where we're sending over in that direction is is greatly increasing so when I.

You expand that out to other organizations I think as Andrew 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 level, there's just a greater level of asset allocation going directly towards those trends because there they are.

And the path of revenue and growth for companies.

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 different considerations, maybe on the product front, obviously hospitality is much different than a CPG. So how much work do you have to do there with customers.

Once they finally decided to go with your platform.

Yeah. It's as you know our positioning is agile experienced management and so in many ways on.

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 that so the configuration and customization I think that's actually 1 of the places where we when we're able to deploy and get our customer rolling quicker and more cheaply than say our.

Competition, who might take a lot of time and client charge a lot of money and so for customers who are interested in agility and then moving quickly I think that's where our value proposition resonates.

Thanks, again and congrats on the quarter.

Kim.

Next question comes from the line of Ron Jose from JMP Securities you were in our lives.

Great. Thanks for taking the question Andrew I think he talked about this a little bit on the call, but I just wanted to touch on a little bit more you know we've talked about increased sales productivity improving retention rates and over the past 6 months. We've just gone through a revamp of the sales force made several hires right out of the high velocity sales team customer success as a new leader.

I think you said corporate positioning is now aligned with customer sort of success for needs and so can you just talk a little bit about where you see the organization is is everything now in place or so now it's focused on even more execution or are there more roles coming that as you sort of go through this and you say you know what we needed is customer success focus for them.

What we're doing just talk to us a little bit more about the organization on how it's aligned and then I'm not too sure I heard yet just insights on the self serve biz gross accelerated there continues to be strong to talk about the drivers there. Thank you.

Yeah on the on your second question first run self serve has been running hot on the product is clearly got great product market fit there was you know traffic expansion.

For a COVID-19 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 at 15% and M. Youre going to see continued expansion and acceleration on the enterprise side and so on.

Mix and the composition of our revenue will be increasingly unimpressed.

On the on the question Ron about strategy Wise, I Love, where we sit today and here's why the categories White-hot digital transformation around the world is happening in every single vertical companies are increasingly thinking about how can my website.

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 1 of the 2 or 3 market leaders.

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 5.

Solutions, we're selling into and so for US you know Tom's team continues to drive R&D product.

Map 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 will we're gonna be on our front foot M be innovative in terms of the product roadmap in the future M&A opportunities as well, but I love, our current positioning and I love, our ability to get to that aspiration.

<unk> 25 per cent revenue growth rate in the future with the current assets and team we have on the floor.

That's great. Thank you and I appreciate it.

I'm from.

Again, if you would like to ask a question. Please press star 1 on your telephone.

Next question comes from the line of Robert cooled Bright from Wells Fargo. Your line is now open.

Hi, good afternoon, a couple of questions. Please.

First off as we've reopened and now maybe or pausing that a bit just wondering if you could talk to any changes you're seeing.

And customer urgency relative focus on on time to value versus obviously, she asked me it's safe.

Sales cycle lengths overall, so taking a step back from the changes you've made in your go to market.

Any broad changes in customer and see a more or less urgent M that you could talk to and then on 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.

Attach rates for the in the Enterprise channel people who've tried you know your market research for audience products from the past wondering if if you could talk to your new ways to drive more frequency or you know, how youre coming back to customers being with that offering with some of the new AI tools that they that you have in your quiver now thank you.

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 and far more digital ways of measuring their digital experience really transformed the way many companies who might have been.

And 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 at slightly different it has probably a little bit to do with the increased competition and the increase in consumer choice on the ability for consumers to.

Move quickly in generational changes market research is more important than ever and the urgency of it is more important than ever and that is really our 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 timescale in matter of months not days. So urgency is absolutely a driver turning to M. On Rex I think it's really important to just recognize that in Q2, we shipped a banner set of solutions that are.

Our research conference I'm, you know you can say if you wanted to just go down the list, we have usage and attitude solutions consumer segmentation product optimization Max depth conjoined feature.

Packed pricing solutions using band Westendorp and gave a great day like the depth of our market research offerings. This is something that the market actually doesn't know yet our salespeople 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 when it's interesting if you.

Look at what our bigger market research customers the ones spending 6 figures or even the financial services companies that we've disclosed for saying 7 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 you know on.

Some of our best logos and highest spenders tend to be the most recognizable fancy brands in our portfolio and to Tom's point, it's the agility. The software in 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 on.

I'll go back to the fact that we cited at the top of the call. So approximately 5 per cent of customers, having more than 1 product today, but I will tell you. When you think of attach rate on a dollar basis of those customers. The complement the combination of market research plus another product is by far the most common on them and so it is showing a lot of traction in the market on like Tom said, we're looking for it.

Telling that story more consistently and broadly to customers.

Great. Thank you.

Next question comes from the line of Youssef Squali from truly Securities. Your line is now open.

Hi, great. Thank you and guys congrats on the solid quarter zone.

Uh huh.

Congrats again on a very high level, how how do you guys see the enterprise sales organization set to face potentially and I hope not but potentially for restrictions in mobility again versus say a year ago arguably you guys on.

We are way ahead of where you were both organizationally in terms of sales force number of sales force. How are you on various house teammates homes, you guys sell et cetera, just any early insights from you know what you're seeing in some of your international markets. They may have gone through or they may be going through some.

Kris restrictions lately.

In terms of Covid and travel and we are shutting down again exactly exactly yes, I mean user. This is this is 1 area, where frankly you know, we're just really well positioned because we're not the.

Gold watch wearing kind, a trombone playing kind of fanfare for our enterprise sales force that needs to go on site. We're not services that we are a software business.

And in Europe in particular, we brought on a guy named Graham Douglas out of Oracle to lead our European sales team, it's been phenomenal he's up level the level of relationships, we have with the large pan European companies that are moving directly into <unk>. So we are able to do all of this on zoom and phone and.

I think other companies that kind of led with services in first class tickets and steak dinners theyre trying to play catch up. So you know our E T v's not be might not be where we want them to be yet, but the way we're poised to compete and win for a world class business. In this environment is great. I think we're all looking forward to spending more time together.

On the office, but travel restrictions are not hurting our ability to win.

That's great that's great to hear and.

1 additional 1 on I apologize because I translate on self serve.

The mid teens is really impressive number.

Considering all things considered.

And you may have touched on this before but maybe can you just speak to maybe the 1 or 2 products on domain helped.

Accelerated that growth this quarter.

Yes, thanks for the compliment use it for that.

Driver of the the outsize performance on self serve.

In many ways the kinds of growth growth lever is around pricing and packaging and license control and our customer base. I think you know that for many years, we've kind of under monetize that business and allowed people to use and share logins. We've just been really driving that and that that's been a big part of the driver in the second half for.

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 gonna 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 it really helps 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 our customers enterprise set of systems, that's really where the kind of R&D investment is going but the business driver is really about you know account verification on licensing control.

And and driving construction in terms of the number of responses.

That makes a ton of sense great.

Great. Thanks, guys.

You said, if you'll remember to the the team's 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 our best of breed kind of collaborative product that is easy to deliver.

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.

I remember I remember very impressive.

Yeah.

And there are no further questions and that's there appears to be no further questions in queue I'd like to surgical over back to CEO Zander Louie for closing remarks, Sir.

Thank you operator and of course, thanks to all the analysts who are here to support and ask those questions look forward to following up with our investors in the weeks to come.

We've come a long way from kind of a rocky Q4 of last year, and it's really been a banner for.

First half and set us up for continued enterprise acceleration in the second half obviously, leading under this momentum brand, which 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 for it to chatting with you again in 90 days.

Yeah.

This concludes today's conference call you may now disconnect.

Bye.

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