San Mateo, CA — SurveyMonkey Inc. (SurveyMonkey), a leading global survey software company, today announced that its parent company, SVMK Inc. (Nasdaq: SVMK, and collectively with SurveyMonkey referred to as “SVMK,” “we” or “us”), reported financial results for the fourth quarter and year ended December 31, 2018, and posted a shareholder letter with complete fourth quarter and fiscal year 2018 financial results and management commentary on its investor relations website at investor.surveymonkey.com.
“Our strong financial results cap off a transformative 2018 and highlight the traction that we are gaining in the marketplace,” said SurveyMonkey CEO Zander Lurie. “We are capitalizing on our strong brand, massive footprint and open integration architecture to move up market into larger enterprise relationships. Our strategy is working. Over the next few years we intend to execute on our plan to double our business by investing efficiently in new products, geographies, and enterprise sales. The survey software category is a multi-billion-dollar global market and being public has helped us share our vision with current and future customers.”
SurveyMonkey also announced that its Chief Financial Officer, Tim Maly, is retiring during the second quarter of 2019 for personal reasons. He will continue to serve in his current role until March 31, 2019, and then plans to remain at the Company as a non-executive employee until June 30, 2019 to assist in the Company’s search for his successor, which is underway, and to advise and support the Company during this transitional period. Mr. Maly will participate on today’s earnings call.
“SurveyMonkey is an incredible company that helped create – and then revolutionized – the category of survey software. My ten-year journey with the company has been a true privilege and I am honored to have worked with such an amazing team,” said Mr. Maly. “SurveyMonkey’s world-class products, inspiring culture of talented employees and proven business model ensure many years of growth and leadership will continue. I am confident in the company’s long-term vision and look forward to seeing Zander and team achieve even greater success in the years to come.”
“Tim has been a high integrity leader whose business acumen, values and resilience helped us achieve critical milestones over the years, culminating in the IPO. Our operational and financial discipline is a testament, in part, to his many contributions,” said Zander Lurie. “On behalf of our entire management team and Board of Directors, we are grateful for Tim’s leadership and friendship over the last decade. We have a strong bench of talent in our finance and accounting organization and look forward to welcoming a new CFO in the coming months.”
Our growth investments are yielding strong results. In 2019, we will continue to invest in efforts that drive enterprise sales, fuel growth in our core self-serve channel, and expand our international business. We also expect to generate significant cash flow over the course of the year while investing to position the company for an even stronger 2020.
Our accelerated growth in the first half of 2018 was driven in part by the pricing changes we made to our SurveyMonkey self-serve plans in 2017, setting up a more difficult comparison from a year-over-year growth perspective in 2019. We expect our growth investments in enterprise sales and self-serve Teams to drive accelerating revenue growth in the second half of 2019. Our investments in international market expansion are expected to contribute to revenue growth towards the end of 2019.
We are adopting the new lease accounting guidance under ASC 8421, effective January 1, 2019. Under this guidance, lease payments associated with our San Mateo headquarters will be treated as operating expense in the income statement beginning in 2019. Prior to 2019, these lease payments were primarily treated as interest expense. We anticipate a headwind to non-GAAP operating income of approximately $6 million on a full-year basis, or approximately $1.5 million each quarter, as these lease payments move from interest expense to operating expense. There is no impact to free cash flow from this change.