As filed with the Securities and Exchange Commission on August 29, 2018.

Registration No. 333-                  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

SVMK Inc.

(Exact name of registrant as specified in its charter)

Delaware	7370	80-0765058
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

One Curiosity Way

San Mateo, California 94403

(650) 543-8400

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Alexander J. Lurie

Chief Executive Officer

SVMK Inc.

One Curiosity Way

San Mateo, California 94403

(650) 543-8400

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Katharine A. Martin, Esq. Rezwan D. Pavri, Esq. Lisa L. Stimmell, Esq. Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, California 94304 (650) 493-9300 Lora D. Blum, Esq. Adam M. Inglis, Esq. SVMK Inc. One Curiosity Way San Mateo, California 94403 (650) 543-8400 Tad J. Freese, Esq. Marc D. Jaffe, Esq. Brian D. Paulson, Esq. Latham & Watkins LLP 140 Scott Drive Menlo Park, California 94025 (650) 328-4600

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒  (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.  ☒

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee
Common Stock, $0.00001 par value per share	$100,000,000	$12,450.00

⁽¹⁾  Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

⁽²⁾  Includes the additional aggregate offering price of shares of our common stock that the underwriters have the option to purchase, if any.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant will file a further amendment which specifically states that this registration statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject To Completion. Dated                 , 2018.

Prospectus

            Shares

Common Stock

This is an initial public offering of shares of common stock of SVMK Inc.

SVMK Inc. is offering shares of its common stock. This is our initial public offering, and no public market currently exists for our shares of common stock. It is currently estimated that the initial public offering price per share will be between $            and $            per share.

We have applied to list our common stock on the NASDAQ Global Select Market under the symbol “SVMK”.

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, may elect to comply with certain reduced public company reporting requirements in future reports after the completion of this offering.

See the section titled “Risk Factors” beginning on page 17 to read about factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discount(1)	$	$
Proceeds, before expenses	$	$

(1) See the section titled “Underwriting (Conflict of Interest)” beginning on page 172 of this prospectus for additional information regarding total underwriting compensation.

At our request, the underwriters have reserved up to     % of the shares of common stock offered by this prospectus for sale, at the initial public offering price, to certain persons associated with us. See the section titled “Underwriters (Conflict of Interest)—Directed Share Program.”

We have granted the underwriters an option for a period of 30 days to purchase from us up to                  additional shares of common stock at the initial public offering price, less the underwriting discount.

The underwriters expect to deliver the shares of common stock to purchasers on                , 2018.

J.P. Morgan	Allen & Company LLC	BofA Merrill Lynch
Credit Suisse	UBS Investment Bank	Wells Fargo Securities

SunTrust Robinson Humphrey CODE Advisors Foros JMP Securities LionTree

                , 2018

OUR MISSION To power curious individuals and organizations to measure, benchmark and act on the opinions that drive success

TABLE OF CONTENTS

	Page
Prospectus Summary		1
Risk Factors		17
Special Note Regarding Forward-Looking Statements		53
Industry and Market Data		55
Use of Proceeds		56
Dividend Policy		57
Capitalization		58
Dilution		60
Selected Consolidated Financial and Other Data		63
Management’s Discussion and Analysis of Financial Condition and Results of Operations		67
Letter from our Chief Executive Officer		100
Business		103
Management		127
Executive Compensation		139
Certain Relationships and Related Party Transactions		152
Principal Stockholders		156
Description of Capital Stock		159
Shares Eligible for Future Sale		165
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Common Stock		168
Underwriting (Conflict of Interest)		172
Legal Matters		184
Experts		184
Where You Can Find Additional Information		184
Index To Consolidated Financial Statements		F-1

Through and including                , 2018 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor any of the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock.

For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit our initial public offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.

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PROSPECTUS SUMMARY

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms “SurveyMonkey,” “the company,” “we,” “us” and “our” in this prospectus refer to SVMK Inc. and its consolidated subsidiaries.

Overview

We are a leading global provider of survey software products that enable organizations to engage with their key constituents, including their customers, employees and the markets they serve. Founded in 1999, SurveyMonkey changed the way people gather feedback by making it easy for anyone to create their own online surveys. Today, SurveyMonkey’s mission is to power curious individuals and organizations to measure, benchmark and act on the opinions that drive success. Our People Powered Data platform enables conversations at scale to deliver impactful customer, employee and market insights to our over 16 million active users globally.

Our widely adopted cloud-based SaaS platform helps individuals and organizations design and distribute surveys that generate an average of more than 20 million answered questions daily across more than 190 countries and territories. Every day our survey platform is used to collect and analyze feedback for a broad range of use cases, such as collecting Net Promoter Score^®, or NPS^®, data from customers, measuring employee engagement or conducting market research regarding the attributes of a future product offering. Our products drive actionable insights that allow organizations to solve mission-critical business problems, including enhancing customer experience and loyalty, increasing employee productivity and retention and optimizing product and marketing investments.

We believe the success of organizations large and small, for profit and non-profit, depends substantially on their ability to understand the expectations of, and respond effectively to, the feedback of their key constituents. The rise of the internet and the coming of age of the millennial generation have raised the bar for organizations to make informed decisions in the face of rapidly evolving business environments. Businesses that rely solely on intuition and anecdotal experience or traditional market research frequently struggle to anticipate and respond effectively to the evolving needs of their key constituents. Organizations have invested heavily in “Big Data” solutions, which are designed to collect and extract information that provides visibility into the observed behavior of key constituents. However, information from Big Data alone is often insufficient to inform decision making as it fails to capture the human voice. The human voice, captured at scale in real time and in a structured manner is what we refer to as People Powered Data. Big Data captures the “what,” People Powered Data captures the “why.” Understanding the “why” enables organizations to make better decisions that can drive optimal outcomes.

We build products that enable individuals and organizations of all sizes to collect and analyze People Powered Data. Our survey platform is powerful, flexible and easy-to-use, supported by a business model that fosters broad distribution. This has enabled us to democratize access for people to engage with their key constituents. Our survey platform leverages SurveyMonkey Genius, our proprietary, AI-based survey creation assistant, which uses insights extracted from our massive data set to guide and optimize survey creation. For organizations, we offer SurveyMonkey Enterprise, which extends our survey platform with enhanced capabilities, including managed user accounts, enterprise-grade security, customized company branding, sophisticated collaboration capabilities and deep integrations with a broad set of leading software applications.

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To serve the needs of more advanced users in organizations of all sizes and across all industries, we have developed purpose-built solutions to provide enhanced value across three key areas: customers, employees and the markets they serve. These purpose-built solutions incorporate specific workflows, benchmarking data and preconfigured analyses to enhance the value our customers can derive from our solutions.

We have a powerful, capital-efficient, self-serve business model that is fueled by the virality of our survey platform. We believe our brand is synonymous with high quality, easy-to-use products. A study we conducted in 2017 showed that 45% of business users who utilize online survey software consider SurveyMonkey to be their survey platform of choice, nearly double the second most recognized alternative, a lightweight tool, and nearly seven times the third-most recognized alternative, an enterprise feedback software application. The strength of our brand enables us to rapidly and cost-effectively acquire new users through organic online searches, paid online marketing and word-of-mouth referrals. Approximately 80% of our new individual paying users come to us directly through our website or organic online search. See “—Key Business Metric—Paying users” below for the definition of paying user. We augment our self-serve business with a highly targeted, direct selling effort that focuses on organizations of all sizes with an existing base of individual self-serve SurveyMonkey users. We use our proprietary, signal-based system, Customer 360, to analyze usage patterns within our customer base, identify high value opportunities and automatically provide leads to our sales team.

Since our founding, we have attracted an aggregate of over 60 million registered users to our survey platform. Of those registered users, over 16 million users were active within the past year and the remainder were inactive during this period. We have over 600,000 paying users across more than 300,000 organizational domains, including paying users in 98% of the Fortune 500, 71 of which have an organization-level agreement with us and the remainder of which have at least one individual paying user within their organization. Additionally, for the six months ended June 30, 2018, we generated approximately 12% of our revenue from customers that had an organization-level agreement with us, and we had over 2,900 customers with organization-level agreements as of June 30, 2018. See the section titled “Business—Our Customers” for definitions of active user and organizational domain. Based on an internal survey, we believe that over 80% of our paying users utilize our products for business purposes, including small and medium businesses, multinational corporations, educational institutions, government agencies and non-profits.

We have a history of delivering revenue growth. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, our revenue was $207.3 million, $218.8 million, $106.5 million and $121.2 million, respectively. For 2016 and 2017, our core revenue was $192.1 million and $214.0 million, respectively, representing year-over-year growth of 11.4%, and for the six months ended June 30, 2017 and 2018, our core revenue was $102.1 million and $121.2 million, respectively, representing period-over-period growth of 18.7%.

We have also delivered strong cash flow from operations. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, we generated cash flow from operations of $35.8 million, $45.0 million, $14.8 million and $22.0 million, respectively. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, our free cash flow was $(4.9) million, $5.6 million, $(6.7) million and $11.8 million, respectively, which included cash payments for interest on our long-term debt of $19.8 million, $19.9 million, $10.0 million and $10.8 million, respectively, a one-time deferred payment of $7.7 million in the first quarter of 2017 related to our acquisition of TechValidate and $4.3 million in third-party fees related to the refinancing of our credit facilities in the second quarter of 2017.

We incurred net losses of $76.4 million, $24.0 million, $19.1 million and $27.2 million for 2016 and 2017, and for the six months ended June 30, 2017 and 2018, respectively, as we continue to invest in our business to capture our large market opportunity.

Core revenue and free cash flow are not financial measures under U.S. generally accepted accounting principles, or GAAP. See the section titled “Management’s Discussion and Analysis of Financial Condition and

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Results of Operations—Non-GAAP Financial Measures” for explanations of how we calculated these measures and for reconciliations to the most directly comparable GAAP financial measures.

Industry Background

The nature of engagement between organizations and their key constituents is changing

The nature of engagement between organizations and their key constituents is fundamentally changing by becoming more open, bi-directional and frequent. Internet-enabled business models, together with rapidly evolving societal changes have revolutionized constituent expectations for service, speed and experience. These constituents demand that organizations react to their feedback with action and their expectations are continually growing, driven by positive experiences with forward-thinking organizations that listen to their feedback and focus on their needs. Organizations that ignore, misinterpret or react too slowly to feedback risk falling behind the competition.

Organizations need constituent feedback to derive actionable insights for decision making

Big Data has been seen as a way to move business decisions away from being overly reliant on intuition and anecdotal experience. Data about the observed behavior of key constituents are now vital to how businesses run. However, Big Data alone is insufficient to optimize decision making. To make good decisions, organizations need to marry Big Data with People Powered Data so that organizations can see beyond basic trends and better understand the issues on which their key constituents are focused. People Powered Data, coupled with Big Data, can more effectively inform everything from investments to pricing decisions to resource allocations to marketing campaigns.

Employees are increasingly empowered to make decisions

Decision making within organizations has become increasingly decentralized. Employees throughout organizations are directly collecting and analyzing feedback, and the access to information enables more decisions to be made at more levels throughout the organization. This accelerates the operating speed of the organization and increases accountability for decision making at all levels. As this data set is aggregated, organizational leadership is also using these insights to improve organization-wide decision making.

The way technology is adopted, deployed and used is evolving

As organizations become more data-centric at all levels and employees become more empowered, the way technology is adopted, deployed and used is evolving. The initial adoption and purchase of technology within an organization is increasingly being driven by business users who seek the best tools for the job and prioritize products that are intuitive and easy-to-use, accessible to individuals with varying levels of technical sophistication, and conducive to collaboration within teams and across business lines. As technology is increasingly adopted organically within an organization, the IT department often takes notice and determines whether the organization should deploy it more broadly. IT departments require managed user accounts, enterprise-grade security, customized company branding, sophisticated collaboration capabilities and deep integrations with a broad set of leading software applications as they build out suites of best-of-breed SaaS products to power their organizations.

Limitations of Traditional Approaches

Historically, because of the limitations associated with traditional methods of collecting and understanding feedback, many organizations relied on data that were inaccurate, incomplete or no longer relevant, or on their intuition and anecdotal experience. The traditional feedback channels include in-house and outsourced research, enterprise feedback software and lightweight digital tools. Each of these has limited the ability of

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organizations to garner actionable insights from constituents because it is susceptible to one or more of the following limitations:

Requires research expertise

Enterprise feedback software often requires significant expertise and specialized knowledge that business users do not possess. Business users are dependent upon internal or external research specialists to operate these systems. Dependency on specialized resources limits an organization’s ability to rapidly execute on multiple projects and reduces the number of projects an organization can undertake.

Low quality data

Certain data collection practices fail to yield quality insights because they are inherently susceptible to low quality results that can be inaccurate and misleading. Specific sources of inaccuracy include flawed methodology, low response rates and non-representative samples. Even when alternative tools have proper methodology, sufficiently high response rates and a representative sample set to generate meaningful data, they often have limited analytic capabilities, which inhibit the ability to derive actionable insights.

Tradeoff between functionality and usability

Other approaches typically involve a tradeoff between functionality and usability that limits their value to organizations. Enterprise-oriented products that offer functionality such as complex survey creation, sophisticated analytical capabilities and enterprise-grade security typically have a more limited deployment within the organization as they lack the ease-of-use to make them readily accessible to non-technical business users. By contrast, lightweight tools that are accessible to business users generally lack enterprise functionality, yield limited insights and often struggle to deal with complex, large-scale feedback-gathering demanded by organizations.

Expensive and slow

Enterprise software can require significant time and cost to install and deploy and often necessitates professional services for installation, deployment, training and ongoing operational support. The nature of these business models has resulted in usage-based pricing, often making it more difficult for customers to predict and manage costs.

Our Market Opportunity

We estimate the U.S. market opportunity for our People Powered Data platform to be approximately $25 billion, and our worldwide opportunity to be significantly larger. We calculate our U.S. market opportunity by multiplying the total number of U.S. knowledge workers, defined as management, professional and related occupations according to the U.S. Bureau of Labor Statistics, by our annual average revenue per paying user. For the six months ended June 30, 2018, 36% of our revenue was from customers outside of the United States. Further, Gartner estimates, in Gartner Market Databook, 2Q18 Update, 20 July 2018, that the United States will represent approximately 50% of total global software spend in 2018 (calculations performed by SurveyMonkey). Based on this, we believe that our aggregate global opportunity is significantly larger than our U.S. market opportunity.

We believe there is substantial third-party validation for our market opportunity. We address portions of three principal segments of existing software and market research spend: customer experience management, talent management software and market research. MarketsandMarkets estimates that approximately $6 billion

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was spent on customer experience management worldwide in 2017. Technavio estimates the global talent management software spend in 2018 at approximately $7 billion. Based on ESOMAR’s Global Market Research 2017 report, the market research industry in 2016 was $45 billion.

SurveyMonkey

SurveyMonkey is a leading global provider of survey software products.

Powering the Curious

Measure

We empower survey creators to measure constituent feedback. We have designed our products to optimize the quality of constituent feedback and maximize response rates.

Benchmark

We enable survey creators to analyze and benchmark the data they have collected. Our benchmarking capabilities allow our customers to assess constituent feedback accurately and compare themselves to industry, geographic and functional baselines as well as their own past performance and internal trends.

Act

We turn the voice of people into actionable data. Our products enable the filtering and comparing of data by cohort, geography, gender, time period, collection method and more. We help customers weave together data to form a narrative that answers the “why,” which enables them to better understand customer and employee attitudes, predict market appetite and identify meaningful opportunities more quickly.

How We Enable Our Customers

Survey Platform

We offer free basic access to our survey platform for individuals, the majority of whom use it for business purposes. Our basic offering gives users the ability to quickly create and deploy simple surveys. Individuals can upgrade to our paid subscription offerings, which include additional features and functionality such as more complex survey capabilities, an unlimited number of surveys, questions and responses, advanced analytics, branding control, 24/7 support and team collaboration. As surveys are being created, SurveyMonkey Genius guides the process.

SurveyMonkey Enterprise

While our products are accessible to individuals with varying levels of technical sophistication, the enterprise-grade version of our survey platform, SurveyMonkey Enterprise, provides enhanced capabilities, including managed user accounts, enterprise-grade security, customized company branding, sophisticated collaboration capabilities and deep integrations with a broad set of leading software applications.

Purpose-Built Solutions

We have developed or acquired several purpose-built solutions that extend the power of our survey platform to enhance our value proposition to organizations across three key areas: customers, employees and the markets they serve.

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Customers

SurveyMonkey CX: Our turn-key NPS solution that transforms customer feedback into actionable insights that drive improved decision making and business outcomes.

TechValidate: Our marketing content automation solution that gives users an efficient process to collect customer feedback at scale and then automatically convert it into powerful validated marketing content.

Employees

SurveyMonkey Engage: Our employee-focused solution tracks and measures employee experiences to help organizations attract and retain talent and pinpoint challenging areas before they become problems.

Markets

SurveyMonkey Audience: Our market-focused solution enables organizations to easily gain real-time feedback from millions of qualified panelists, powered by our proprietary panel of more than 1.4 million U.S. consumers and augmented by global partners to reach additional consumers in over 100 countries around the world.

Customer 360

Customer 360 is our proprietary, signal-based system fueled by our data science models that analyzes usage patterns and signals across our entire user base to identify opportunities to convert active users to paying users, upsell organizations to enterprise accounts, expand existing enterprise relationships and cross-sell purpose-built solutions.

Benefits of Our Products

Easy-to-use

We designed our survey platform for broad adoption within and across organizations for virtually any use case. We have revolutionized the feedback gathering process through ease-of-use, broad availability and a delightful user experience, while providing sophisticated analytics tools that provide in-depth feedback analysis to business users without requiring such users to have specialized knowledge or expertise.

Quality of data insights

Our products are used to deliver high-quality insights in real time. Cumulatively, approximately 47 billion questions have been answered on our survey platform which, when coupled with SurveyMonkey Genius, allows us to help survey creators craft their surveys with best practices in question writing and survey structure. Our brand recognition, intuitive user interface, and ease of use across web, mobile and other channels drive strong response rates and accelerate time to respond. Additionally, SurveyMonkey Audience offers survey creators the ability to target representative samples of respondents in the United States and in over 100 countries around the world. Automatically-generated reports and customizable charts can be shared broadly throughout an organization, enabling insightful data to be acted upon and driving more effective decision making.

Scalable, flexible and robust

We have developed a suite of products that are flexible across use cases and scalable across organizations of all sizes. While our survey platform is intuitive, easy-to-use and accessible without implementation, professional services or training, it is also designed to meet the requirements of the most stringent enterprises.

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Rapid time to value and strong return on investment

Our intuitive products require minimal time to implement and deploy, empowering users to gain actionable insights quickly and while they are still relevant. Our products seamlessly integrate with software and application partners, such as Salesforce, Marketo, Oracle, Microsoft, Google and Slack, enabling users to distribute surveys across multiple channels to reach respondents wherever they are and to embed People Powered Data directly into their existing systems of record. Our products can be deployed without implementation, professional services or training. We offer user-based pricing for our survey platform, which gives organizations cost visibility and predictability.

Our Strengths

Trusted and established brand

We believe SurveyMonkey is a category-defining global brand. Our products are inherently viral; by sending surveys through our survey platform, our users build awareness on our behalf. We have enhanced the reach and strength of our brand through partnerships with major news organizations, including NBC News, CNBC, the New York Times, the Washington Post and Fortune, and specialized news sources, such as Axios, Vanity Fair and the Undefeated.

Massive user base

Since our founding, we have attracted an aggregate of over 60 million registered users to our survey platform. With over 16 million active users in more than 190 countries and territories, we believe we are the most widely used survey product globally. Additionally, we have paying users across more than 300,000 organizational domains, giving us a significant opportunity to convert many of these organizations to SurveyMonkey Enterprise customers.

Powerful business model

We have a powerful, capital-efficient, self-serve business model that is fueled by the virality of our platform. Due to our strong brand recognition, approximately 80% of our new individual paying users come to us directly through our website or organic online search. We operate with low variable costs, allowing us to support incremental users without incurring significant incremental costs. We have developed a proprietary, signal-based system, Customer 360, to analyze usage patterns within our customer base, identify high value opportunities and automatically provide leads to our sales team.

Extensive data set enhanced with AI

We believe that the insights generated from our extensive data set, coupled with our investments in AI and machine learning, have enabled us to create survey products that are better and easier to use. As more people use our survey platform, we collect additional responses which we use to strengthen our products, industry benchmarks and survey methodology.

Our Growth Strategy

Attract more users and customers

Our users are our best advocates. When users send surveys and collaborate with others to share results, they introduce SurveyMonkey to new potential users, driving viral growth. We further enhance the virality of our products by continually investing in new features and improvements to functionality that drive

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collaboration and engagement. We also plan to continue to grow our sales organization and invest in our marketing efforts, including user conferences, events and lead generation for our SurveyMonkey Enterprise and purpose-built solutions selling efforts.

Upsell and cross-sell within our existing customer and user base

Our base consists of over 600,000 paying users across more than 300,000 organizational domains, including paying users in 98% of the Fortune 500, 71 of which have an organization-level agreement with us and the remainder of which have at least one individual paying user within their organization. Additionally, for the six months ended June 30, 2018, we generated approximately 12% of our revenue from customers that had an organization-level agreement with us, and we had over 2,900 customers with organization-level agreements as of June 30, 2018. Our user base represents a large, embedded growth opportunity. Based on an internal survey, we believe that over 80% of our paying users utilize our products for business purposes, which also creates an opportunity to significantly increase conversion from individual paid subscriptions to our enterprise offerings. We leverage our proprietary Customer 360 engine to identify opportunities to convert individual users to paying users and organizations where we have multiple individual relationships and usage patterns that indicate a high probability for conversion to our enterprise offerings. As we further penetrate organizations, we expand our cross-selling effort by focusing on purpose-built solutions.

Invest in international growth

In 2017, we generated 35% of our revenue from customers outside of the United States and we see significant opportunity for growth internationally. We are investing in marketing our self-serve products and increasing awareness of our brand to drive international growth. We are also developing a more localized product experience and expanding our international data center presence to improve user experience and website speed. In addition to increasing our marketing and product investments to accelerate growth, we plan to build a dedicated international sales team in Europe with the goal of leveraging Customer 360 to efficiently upsell and cross-sell SurveyMonkey Enterprise and our purpose-built solutions to our large international user base.

Develop new products and expand existing features, functionality and interoperability

We are building new products and enhancing the features and functionality of our existing products. Recent examples include purpose-built solutions, such as SurveyMonkey CX and SurveyMonkey Engage, and additional response collection methods, such as SurveyMonkey Anywhere, our offline data collection mode, and data collection via QR code.

We extend the scale and reach of our survey platform via integrations with third-party applications, and we intend to further integrate our products with our customers’ key systems of record to enhance our value proposition and create additional selling opportunities.

Selectively pursue acquisitions

We have a strong track record of driving growth and delivering value through the successful integration of acquisitions. We believe our large user base, extensive data set, integration capabilities and products provide opportunities for us to drive value-added growth through acquisitions in key areas such as product, market and geographic expansion.

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Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, but are not limited to, the following:

• Our business depends on our ability to retain and upgrade customers, and any decline in renewals or upgrades could adversely affect our business, results of operations and financial condition.

• Our revenue growth rate has fluctuated in recent periods and may slow in the future.

• Our business depends on a strong and trusted brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our customer and user base, our market share and our ability to attract and retain employees.

• One of our marketing strategies is to offer a limited free version of our product on a self-serve basis, and we may not be able to realize the benefits of this strategy.

• If we are unable to continue to increase adoption of our products through our self-serve model, our business, results of operations and financial condition may be adversely affected.

• As a substantial portion of our sales efforts are increasingly targeted at winning SurveyMonkey Enterprise customers, our sales cycle may become lengthier and more expensive, we may encounter greater pricing pressure and our customers may be displeased with our customer support, all of which could harm our business and results of operations.

• We may not succeed in building a significant and effective salesforce, and we may fail to manage our sales channels effectively.

• Any significant disruption in service or security on our websites or in our systems could result in a loss of users, damage to our reputation and harm to our business.

• We may not timely and effectively scale and adapt our existing technology and network infrastructure to rapid technological changes, enhance our existing products or develop new products.

• Our industry is intensely competitive, and competitors may succeed in reducing our sales.

• We have substantial indebtedness and lease obligations, which reduce our capability to withstand adverse developments or business conditions.

• Upon completion of this offering, our executive officers, directors and holders of 5% or more of our common stock will collectively beneficially own approximately         % of the outstanding shares of our common stock and continue to have substantial control over us, which will limit your ability to influence the outcome of important transactions, including a change in control.

Channels for Disclosure of Information

Following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission, or the SEC, the investor relations page on our website (www.surveymonkey.com), press releases, public conference calls and public webcasts.

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Corporate Information

We were incorporated in Delaware in October 2011 as SurveyMonkey Inc. in connection with the reorganization of SM Holdco LLC, and we changed our name to SVMK Inc. in March 2013. SM Holdco LLC was

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formed in Delaware in February 2009 in connection with its acquisition of SurveyMonkey.com LLC, an Oregon LLC, and an investment by Spectrum Equity and Bain Capital Ventures in April 2009. The SurveyMonkey business was founded by Ryan Finley in 1999 in Madison, Wisconsin and he subsequently formed SurveyMonkey.com LLC in Oregon in 2004. Our principal executive offices are located at One Curiosity Way, San Mateo, California 94403, and our telephone number is (650) 543-8400. Our website address is www.surveymonkey.com. Information contained on, or that can be accessed through, our website does not constitute part of this prospectus and inclusions of our website address in this prospectus are inactive textual references only.

SurveyMonkey, the SurveyMonkey logo, the Goldie logo, People Powered Data, SVMK and our other registered or common law trademarks, service marks or trade names appearing in this prospectus are the property of SurveyMonkey Inc., our wholly-owned subsidiary. Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc., and other trademarks and trade names referred to in this prospectus are the property of their respective owners.

Implications of Being an Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise applicable generally to public companies. These reduced reporting requirements include:

• the requirement to present only two years of audited financial statements and only two years of related management’s discussion and analysis in this prospectus;

• an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal control over financial reporting;

• reduced disclosure about our executive compensation arrangements; and

• an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or shareholder approval of any golden parachute arrangements.

We may take advantage of these provisions until we are no longer an emerging growth company. We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify as a large accelerated filer, with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

We are choosing to irrevocably “opt out” of the extended transition periods available under the JOBS Act for complying with new or revised accounting standards, but we intend to take advantage of the other exemptions discussed above. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

See the section titled “Risk Factors—Risks Related to Our Business—We are an “emerging growth company,” and our election to comply with the reduced disclosure requirements as a public company may make our common stock less attractive to investors.”

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THE OFFERING

Common stock offered by us                 shares

Option to purchase additional shares of common stock from us                 shares

Common stock to be outstanding immediately after this offering                 shares (         shares, if the underwriters’ option to purchase additional shares of our common stock from us is exercised in full)

Use of proceeds We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $         (or approximately $         if the underwriters’ option to purchase additional shares of our common stock from us is exercised in full), based upon the assumed initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the proceeds from this offering, net of underwriting discounts and commissions and expenses payable by us, to (i) partially repay $         of the outstanding indebtedness under our credit facilities and (ii) pay certain income tax withholding and remittance obligations of $         (for which we will withhold shares) related to the settlement of 3,594,405 restricted stock units, or RSUs, for which we expect the liquidity event-related performance vesting condition, or the Performance Vesting Condition, to be satisfied upon effectiveness of this offering, and for which the service condition has been satisfied as of June 30, 2018, or the RSU Settlement. This amount is based upon the assumed initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus. We intend to use the remainder of the net proceeds from this offering for working capital and other general corporate purposes, as well as the acquisition of, or investment in, complementary products, technologies, solutions or businesses, although we have no present commitments or agreements to enter into any material acquisitions or investments. See the section titled “Use of Proceeds” for additional information.

Proposed trading symbol “SVMK”

Conflict of interest Affiliates of J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, underwriters in this offering, will receive at least 5% of the net proceeds of this offering in connection with the repayment of $             million of our outstanding indebtedness under our credit facilities. See the section titled “Use of Proceeds.” Accordingly, this offering is being made in compliance

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with the requirements of FINRA Rule 5121. This rule requires, among other things, that a “qualified independent underwriter” has participated in the preparation of, and has exercised the usual standards of “due diligence” with respect to, the registration statement. Allen & Company LLC has agreed to act as qualified independent underwriter for this offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act of 1933, as amended, or the Securities Act.

The number of shares of our common stock that will be outstanding immediately after this offering is based on 103,891,268 shares of our common stock outstanding as of June 30, 2018 (which includes 2,156,643 shares of common stock representing the net number of shares that we will deliver to certain holders of RSUs upon the effectiveness of this offering in connection with the RSU Settlement), and excludes:

• 17,011,811 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock that were outstanding as of June 30, 2018, with a weighted average exercise price of $14.46 per share;

• 6,839,513 shares of our common stock issuable upon the vesting of RSUs that were outstanding as of June 30, 2018 where the service-based vesting condition and Performance Vesting Condition are not met;

• 661,771 shares of our common stock issuable upon the vesting of RSUs granted after June 30, 2018;

• 1,390,753 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock that were granted after June 30, 2018, with an exercise price of $13.65 per share; and

• 16,560,053 shares of our common stock reserved for future issuance under our equity compensation plans, consisting of:

• 9,394,744 shares of our common stock to be reserved for future issuance under our 2018 Equity Incentive Plan, or our 2018 Plan, which will become effective prior to the completion of this offering;

• 4,491,865 shares of our common stock reserved for future issuance under our 2011 Equity Incentive Plan, or our 2011 Plan, which number of shares will be added to the shares of our common stock to be reserved for future issuance under our 2018 Plan upon its effectiveness; and

• 2,673,444 shares of our common stock to be reserved for future issuance under our 2018 Employee Stock Purchase Plan, or our ESPP, which will become effective prior to the completion of this offering.

Our 2018 Plan and ESPP each provide for annual automatic increases in the number of shares of our common stock reserved thereunder, and our 2018 Plan also provides for increases to the number of shares of our common stock that may be granted thereunder based on shares under our 2011 Plan that expire, are forfeited, or otherwise repurchased by us, as more fully described in the section titled “Executive Compensation—Employee Benefits and Stock Plans.”

Except as otherwise indicated, all information in this prospectus assumes:

• the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the effectiveness of our amended and restated bylaws, each of which will occur immediately prior to the completion of this offering;

• no exercise of outstanding stock options or the settlement of outstanding RSUs subsequent to June 30, 2018; and

• no exercise by the underwriters of their option to purchase additional shares of common stock from us in this offering.

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SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

The following summary consolidated financial data should be read in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto included elsewhere in this prospectus. The consolidated statements of operations data for each of the years ended December 31, 2016 and 2017 are derived from our audited consolidated financial statements that are included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended June 30, 2017 and 2018, and the consolidated balance sheet data as of June 30, 2018, have been derived from our unaudited condensed consolidated financial statements appearing elsewhere in this prospectus. We have prepared the unaudited summary consolidated financial data set forth below on a basis consistent with our audited annual consolidated financial statements, included elsewhere in this prospectus, and include, in our opinion, all normal recurring adjustments necessary for the fair presentation of the results of operations for the periods presented. Our historical quarterly results are not necessarily indicative of our results of operations to be expected for the remainder of 2018 or any future period. The summary consolidated financial data in this section are not intended to replace the consolidated financial statements and related notes thereto included elsewhere in this prospectus and are qualified in their entirety by the consolidated financial statements and related notes thereto included elsewhere in this prospectus.

Consolidated Statements of Operations Data

	Year Ended December 31,						Six Months Ended June 30,
(in thousands, except per share amounts)	2016			2017			2017			2018
Revenue	$	207,295		$	218,773		$	106,452		$	121,187
Cost of revenue(1)(2)		67,755			62,679			30,842			35,754
Gross profit		139,540			156,094			75,610			85,433
Operating expenses:
Research and development(1)		37,985			53,660			24,980			34,232
Sales and marketing(1)(2)		73,970			73,511			36,913			37,300
General and administrative(1)		36,832			47,940			24,129			26,418
Restructuring(1)		25,256			1,785			145			33
Total operating expenses		174,043			176,896			86,167			97,983
Loss from operations		(34,503	)		(20,802	)		(10,557	)		(12,550	)
Interest expense		32,893			26,865			13,316			14,685
Other non-operating income (expense), net		(4,250	)		7,610			7,176			351
Loss before income taxes		(71,646	)		(40,057	)		(16,697	)		(26,884	)
Provision for (benefit from) income taxes		4,704			(16,047	)		2,400			296
Net loss	$	(76,350	)	$	(24,010	)	$	(19,097	)	$	(27,180	)
Net loss per share, basic and diluted	$	(0.77	)	$	(0.24	)	$	(0.19	)	$	(0.27	)
Weighted-average shares used in computing basic and diluted net loss per share		98,539			100,244			99,787			101,419
Pro forma net loss per share, basic and diluted(3)				$	(0.24	)				$	(0.26	)
Weighted-average shares used in computing pro forma basic and diluted net loss per share (unaudited)(3)					101,126						103,264

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⁽¹⁾  Includes stock-based compensation, net of amounts capitalized as follows:

	Year Ended December 31,				Six Months Ended June 30,
(in thousands)	2016		2017		2017		2018
Cost of revenue	$	4,114	$	2,503	$	1,236	$	1,304
Research and development		5,756		9,918		4,266		6,413
Sales and marketing		8,712		8,069		5,300		1,915
General and administrative		12,301		14,496		7,139		7,660
Restructuring		2,074		—		—		—
Stock-based compensation, net of amounts capitalized	$	32,957	$	34,986	$	17,941	$	17,292

⁽²⁾  Includes amortization of acquired intangible assets as follows:

	Year Ended December 31,				Six Months Ended June 30,
(in thousands)	2016		2017		2017		2018
Cost of revenue	$	4,505	$	2,040	$	1,064	$	976
Sales and marketing		4,267		2,421		1,213		1,208
Amortization of acquired intangible assets	$	8,772	$	4,461	$	2,277	$	2,184

⁽³⁾  See Note 12 of the Notes to Consolidated Financial Statements included elsewhere in this prospectus for an explanation of the method used to calculate basic and diluted net loss per common share and pro forma net loss per common share.

Consolidated Balance Sheet Data

	As of June 30, 2018
(in thousands)	Actual		Pro Forma(1)(2)
Cash and cash equivalents	$	43,391	$
Working capital(3)		26,273
Total deferred revenue(4)		99,559
Financing obligation on leased facility		92,682
Total debt, net		317,304
Total stockholders’ equity		27,609

⁽¹⁾  The pro forma column in the balance sheet data table above gives effect to: (i) the sale and issuance by us of shares of our common stock in this offering, based upon the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses, (ii) stock-based compensation expense of $80.9 million, associated with the RSU Settlement, as if the offering was completed as of June 30, 2018, (iii) payment of approximately $             to satisfy certain income tax withholding and remittance obligations related to the RSU Settlement based upon the assumed initial public offering price of $            per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and (iv) the partial repayment of $             of the outstanding indebtedness under our credit facilities.

⁽²⁾  Each $1.00 increase or decrease in the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, (a) the amount of our pro forma cash and cash equivalents, working capital, total assets and total stockholders’ equity by $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions payable by us and (b) the amount we would be required to pay to satisfy certain income tax withholding and remittance obligations related to the RSU Settlement by $            . We may also increase or decrease the number of shares we are offering. An increase or decrease of 1.0 million shares in the number of shares offered by us would increase or decrease, as applicable, the amount of our pro forma cash and cash equivalents, working capital, total assets and total stockholders’ equity by $            , assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions.

⁽³⁾  Working capital is calculated as current assets less current liabilities, excluding deferred revenue.

⁽⁴⁾  Includes $99.3 million of short-term deferred revenue and $0.3 million of long-term deferred revenue (included in other non-current liabilities).

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Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2016			2017			2017			2018
Net cash provided by operating activities	$	35,842		$	45,026		$	14,765		$	22,031
Net cash used in investing activities		(46,903	)		(32,345	)		(13,461	)		(9,277	)
Net cash provided by (used in) financing activities		614			(614	)		2,088			(4,540	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(10,447	)	$	12,058		$	3,392		$	8,214

Key Business Metric

To analyze our business performance, determine financial forecasts and help develop long-term strategic plans, we review the following key business metric:

	As of December 31,				As of June 30,
(in thousands)	2016		2017		2017		2018
Paying users		575		606		598		616

Paying users

We define a paying user as an individual customer of our survey platform or form-based application, a seat within a SurveyMonkey Enterprise deployment or a subscription to one of our purpose-built solutions. One person would count as multiple paying users if the person had more than one paid license at the end of the period. For example, if an individual paying user also had a designated seat in a SurveyMonkey Enterprise deployment, we would count that person as two paying users.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric” for additional information.

Non-GAAP Financial Measures

We believe that, in addition to our results determined in accordance with GAAP, core revenue, average revenue per paying user, free cash flow and adjusted EBITDA, all of which are non-GAAP financial measures, are useful in evaluating our business, results of operations and financial condition.

	Year Ended December 31,					Six Months Ended June 30,
(in thousands, except ARPU)	2016			2017		2017			2018
Core revenue	$	192,056		$	213,984	$	102,062		$	121,187
Average revenue per paying user (ARPU)		349			362		351			400
Free cash flow		(4,895	)		5,579		(6,718	)		11,755
Adjusted EBITDA		64,721			61,882		31,060			28,427

Core revenue

We define core revenue as revenue from our survey platform, form-based application and purpose-built solutions, excluding the non-self-serve portion of our SurveyMonkey Audience solution, which we generally ceased offering at the end of the second quarter of 2017.

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Average revenue per paying user

We define average revenue per paying user, or ARPU, as core revenue divided by the average number of paying users during the period. For interim periods, we use annualized core revenue which is calculated by dividing the core revenue for the period by the number of days in that period and multiplying this value by 365 days. We calculate the average number of paying users by adding the number of paying users as of the end of the prior period to the number of paying users as of the end of the current period, and then dividing by two.

Free cash flow

We define free cash flow as net cash provided by operating activities less purchases of property and equipment, net of tenant improvement reimbursements, and capitalized internal-use software. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, our free cash flow included cash payments for interest on our long-term debt of $19.8 million, $19.9 million, $10.0 million and $10.8 million, respectively, a one-time deferred payment of $7.7 million in the first quarter of 2017 related to our acquisition of TechValidate and $4.3 million in third-party fees related to the refinancing of our credit facilities in the second quarter of 2017.

Adjusted EBITDA

We define adjusted EBITDA as net loss excluding interest expense, provision for (benefit from) income taxes, depreciation and amortization, other non-operating expenses (income), net, stock-based compensation and restructuring, financing and acquisition-related costs.

Core revenue, ARPU, free cash flow and adjusted EBITDA are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for explanations of how we calculated these measures and for reconciliations to the most directly comparable GAAP financial measures.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock. Our business, results of operations, financial condition or prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of the risks actually occur, our business, results of operations and financial condition could be adversely affected. In that event, the market price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Business

Our business depends on our ability to retain and upgrade customers, and any decline in renewals or upgrades could adversely affect our business, results of operations and financial condition.

Our business depends upon our ability to maintain and expand our relationships with our users. Customers can choose between monthly or annual subscriptions, and customers are not obligated to and may not renew their paid subscriptions after their existing plans expire. As a result, we cannot assure that customers will renew their paid plans utilizing the same tier of our products and solutions or upgrade to our premium products or solutions. Renewals of paid plans may decline or fluctuate because of several factors, such as dissatisfaction with our products, solutions or support, a user no longer having a need for our products or the perception that competitive products are better or less expensive options. As our customer base continues to grow, even if our customer retention rates remain the same on a percentage basis, the absolute number of customers we lose each month will increase. We must continually add new customers to replace customers whose accounts are cancelled or terminated and to grow our business beyond our current user base, which may involve significantly higher marketing expenses than we currently anticipate.

We invest in new features and improvements to our product functionality as well as targeted marketing campaigns to drive conversion of unpaid users to paying users. Individual users often bring us into their organization for business purposes, and from there we seek to establish an organizational relationship through the deployment of SurveyMonkey Enterprise. As we scale within organizations, we seek to further grow the business relationship by cross-selling purpose-built solutions. If our customers fail to renew or cancel their subscriptions, or if we fail to upgrade our customers to higher tier individual subscriptions or to SurveyMonkey Enterprise, our business, results of operation and financial condition may be harmed. Although it is important to our business that our customers renew their subscriptions after their existing plans expire and that we expand our commercial relationships with our customers, given the volume of our customers, we do not track the retention rates of our individual active users. However, we do track dollar-based net retention rate information on an aggregate basis.

Additionally, many of our users initially register to use our free basic survey product. We strive to demonstrate the value of our products to our registered users, thereby encouraging them to convert to paying users through end-of-survey marketing. Since our founding, we have attracted an aggregate of over 60 million registered users, of which over 600,000 are currently paying users. The actual number of unique users may be lower than we report as one person could count as multiple registered users, active users or paying users. For example, if an individual paying user also had a designated seat in a SurveyMonkey Enterprise deployment, we would count that person as two paying users. As a result, we may have fewer unique users that we may be able to convert, upsell or cross-sell. Our inability to determine the number of our unique users is a limitation in the data that we measure and may adversely affect our understanding of certain aspects of our business and make it more challenging to manage our business. A majority of our registered users may never convert to a paying user, and if we are unable to convert free users to paying users, our business, results of operations and financial condition could suffer.

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In the event that we are unable to attract and retain customers, convert unpaid users to customers, and develop and expand relationships with organizational customers, our business, results of operations and financial condition may be adversely affected.

Our revenue growth rate has fluctuated in recent periods and may slow in the future.

We have a history of delivering revenue growth and positive cash flow from operations. However, our rates of revenue growth have slowed and fluctuated, and may continue to slow in the future. Many factors may contribute to declines in our growth rates, including higher market penetration, increased competition, slowing demand for our survey platform, a failure by us to continue capitalizing on growth opportunities and the maturation of our business, among others. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. If our growth rates decline, investors’ perceptions of our business and the trading price of our common stock could be adversely affected.

Our business depends on a strong and trusted brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our customer and user base, our market share and our ability to attract and retain employees.

We have developed a strong and trusted brand that we believe has contributed significantly to the success of our business. We believe that enhancing and maintaining awareness of the SurveyMonkey brand in a cost-effective manner is critical to our goal of achieving widespread acceptance of our existing and future products, attracting new customers and attracting and retaining top talent. Furthermore, we receive a high degree of media coverage around the world and we believe that the importance of brand recognition will increase as competition in our industry increases. Successful promotion of our brand will depend largely on the effectiveness of our marketing and media partnership efforts and the effectiveness and affordability of our products for our target customer demographic. Such brand promotion activities may not yield increased revenue and, even if they do, any revenue increases may not offset the expenses we incur to promote our brand. Unfavorable publicity regarding, for example, our privacy practices, terms of service, service quality, litigation, regulatory activity or the perception of inaccurate poll data from properly or improperly drafted surveys by third parties using our survey platform, the actions of our partners and customers or the actions of other companies that provide similar products and solutions to us, could adversely affect our reputation, brand, the size and engagement of our user base and our ability to attract and retain users. If we fail to promote and maintain our brand successfully, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may lose our existing customers to our competitors or be unable to attract new customers or employees, which could harm our business, results of operations and financial condition.

One of our marketing strategies is to offer a limited free version of our product on a self-serve basis, and we may not be able to realize the benefits of this strategy.

We offer a free basic survey product in order to promote our brand, build awareness and fuel the virality of our survey platform. Most users never convert from our free basic version to a paid version of our product. Our marketing strategy also depends in part on persuading users who use the free version of our product to become a paying user, either as an individual or to convince organizational decision makers to purchase and deploy SurveyMonkey Enterprise. To the extent that these users do not become, or lead others to become, paying users, we will not realize the intended benefits of this marketing strategy, and our business, results of operations and financial condition may be harmed.

If we are unable to continue to increase adoption of our products through our self-serve model, our business, results of operations and financial condition may be adversely affected.

Historically, our business model has been driven by organic adoption and viral growth, particularly from conversion of our free users to paid, with approximately 80% of our new individual paying users coming to us

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directly through our website or organic online search. We are currently expanding our salesforce, which has historically been limited. Although we believe our business model can continue to scale without a significantly larger salesforce, our self-serve model may not continue to be as effective as we anticipate, which may impede our future growth.

As a substantial portion of our sales efforts are increasingly targeted at winning SurveyMonkey Enterprise customers, our sales cycle may become lengthier and more expensive, we may encounter greater pricing pressure and our customers may be displeased with our customer support, all of which could harm our business and results of operations.

As a substantial portion of our sales efforts are increasingly targeted at prospective customers for SurveyMonkey Enterprise, we face greater costs, longer sales cycles and less predictability in the completion of some of our sales. In this market, the customer’s decision to use our products may be an enterprise-wide decision, in which case these types of sales require us to provide greater levels of customer education to familiarize these customers regarding the uses, features and benefits of our products and purpose-built solutions, as well as education regarding security and governance, privacy and data protection laws and regulations, especially for those customers in more heavily-regulated industries. In addition, larger enterprises may demand more support services and features, which puts additional pressure on our support and success organizations to satisfy the increased support required for our customers. Further, as we continue to grow our operations and support our global user base, we need to be able to continue to provide efficient customer support that meets our customers’ needs globally at scale. As a result of these factors, these sales opportunities may require us to devote greater sales support and professional survey platform resources to paying users in order to familiarize these new customers with our value proposition, or require us to hire additional support personnel, which could increase our costs and sales cycle and divert our own sales and professional services resources to a smaller number of larger customers. We rely on Customer 360, our proprietary, signal-based system fueled by our data science models, to identify and target prospective customers, but there is no guarantee that this system will correctly identify the correct opportunities. These significant expenditures in time and money may not result in a sale. Our strategy is to work with third parties to increase the breadth of capability and depth of capacity for delivery of our products and solutions to our customers. If a customer is not satisfied with the quality or interoperability of our products and solutions with their own IT environment, we could incur additional costs to address the situation, which could adversely affect our margins. Moreover, any customer dissatisfaction with our products and solutions, or a failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could damage our ability to encourage broader adoption of our products by that customer and positive recommendations to other potential users. In addition, any negative publicity resulting from such situations, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.

We may not succeed in building a significant and effective salesforce, and we may fail to manage our sales channels effectively.

While a growing portion of our revenue in recent periods has been derived from our sales efforts, we are investing in building and developing a larger and more robust salesforce, particularly internationally, where our brand is less well known, but we may not be as successful as we anticipate. Our limited experience selling directly to small, medium and large organizations through our salesforce may impede our future growth. Further, our ability to manage a larger direct salesforce is uncertain. Identifying and recruiting additional qualified sales personnel and training them requires significant time, expense and attention. In addition, many organizations undertake a significant evaluation and negotiation process, which can lengthen our sales cycle, and some organizations demand more specialized features on our survey platform. We may spend substantial time, effort and money on sales efforts without any assurance that our efforts will produce any sales. As a result, our sales efforts may lead to greater unpredictability in our business, results of operations and financial condition.

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Additionally, we have global partners who broaden the scope of our SurveyMonkey Audience solution by providing access to additional panelists in over 100 countries around the world. Our partners are generally in nonexclusive agreements with us, are not subject to minimum obligations and may be terminated at any time without cause. If we fail to manage our sales efforts successfully or they otherwise fail to perform as we anticipate, it could reduce our sales and increase our expenses, as well as weaken our competitive position.

Any significant disruption in service or security on our websites or in our systems could result in a loss of users, damage to our reputation and harm to our business.

Our brand, reputation and ability to attract and retain users and customers depend in part upon the reliable performance of our network infrastructure, websites, other systems and those of third-party service providers. We have experienced, and may in the future experience, interruptions in these systems, including server failures that temporarily impair or disable the performance of our websites due to a variety of factors, such as infrastructure changes, human or software errors, capacity constraints and denial of service or fraud or security attacks. In some instances, we may not be able to rectify or even identify the cause or causes of these site performance problems within an acceptable period of time. As our solutions become more complex and our user traffic increases, we expect that it will become increasingly challenging to maintain and improve the performance of our products and solutions, especially during peak usage times. If our products are unavailable to users or fail to function as quickly as users expect, it could result in reduced customer satisfaction and reduced attractiveness of our survey platform to customers. This in turn could lead to decreased sales to new customers, harm our ability to retain existing customers and the issuance of service credits or refunds, any of which could hurt our business, results of operations and financial condition.

We expect to continue to make significant investments to build new products and enhance the features and functionality of our existing products and solutions. To the extent that we do not effectively address capacity constraints, upgrade our systems and data centers as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed. Further, even if we are able to upgrade our systems, any such expansion will be expensive and complex, requiring management time and attention. Additionally, problems with the reliability or security of our systems, including unauthorized access to or improper use of the information of our users, could harm our reputation and negatively affect our business. Affected users could also initiate legal or regulatory action against us in connection with such incidents, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices.

We may not timely and effectively scale and adapt our existing technology and network infrastructure to rapid technological changes, enhance our existing products and solutions or develop new products.

The industry in which we compete is characterized by rapid technological change and frequent introductions of new products and solutions, as well as changing customer needs, requirements and preferences. Our ability to grow our user base and increase revenue from existing customers will depend heavily on our ability to enhance the features and functionality of our products and solutions, introduce new products and solutions, anticipate and respond effectively to these changes on a timely basis and interoperate across an increasing range of devices, operating systems and third-party applications. The success of our products depends on our continued investment in our research and development organization to increase the accessibility, ease-of-use and interoperability of our existing solutions and the development of features and functionality that users may require.

The introduction of new products and solutions by competitors or the development of entirely new technologies to replace existing offerings could make our survey platform and other solutions obsolete or adversely affect our business, results of operations and financial condition. We may experience difficulties with software development, design or marketing that could delay or prevent our development, introduction or implementation of our product experiences, features or capabilities. We have in the past experienced delays in

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our internally planned release dates of new features and capabilities, and we cannot assure you that new product experiences, features or capabilities will be released according to schedule. If users do not widely adopt our survey platform or purchase our products and services, we may not be able to realize a return on our investment. If we do not accurately anticipate user demand or we are unable to develop, license or acquire new features and capabilities on a timely and cost-effective basis, or if such enhancements do not achieve market acceptance, it could result in adverse publicity, loss of revenue or market acceptance or claims by users brought against us, each of which could have a material and adverse effect on our reputation, business, results of operations and financial condition.

If our security measures are compromised, or if our websites are subject to attacks that degrade or deny the ability of users and respondents to access our products, or if our customer or respondent data are compromised, users may curtail or stop use of our survey platform.

Our products collect, process, store, share, disclose and use customers’ and respondents’ information and communications, some of which may be private. We also work with third-party vendors to process credit card payments by our customers and are thus subject to payment card association operating rules, and rely on the availability of our third-party payment processors. We are vulnerable to software bugs, computer viruses, break-ins, phishing attacks, employee errors or malfeasance, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our computer systems, any of which could lead to interruptions, delays or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or confidential information. It is virtually impossible for us to entirely mitigate the risk of breaches of our survey platform or other security incidents affecting our products, internal systems, networks or data. In addition, the functionality of our products may be disrupted by third parties, including disgruntled employees, former employees or contractors. The security measures we use internally, and have integrated into our products, which are designed to detect unauthorized activity and prevent or minimize security breaches, may not function as expected or may not be sufficient to protect against certain attacks. If we experience compromises to our security that result in site performance or availability problems, the complete shutdown of our websites or the actual or perceived loss or unauthorized disclosure or use of confidential information, such as credit card information, personal health information, trade secrets or other proprietary information, our users may be harmed or lose trust and confidence in us and choose to decrease the use of our products, which would cause us to suffer reputational and financial harm.

In addition, we may be subject to regulatory investigations or litigation in connection with a security breach or related issues, and we could also be liable to third parties for these types of breaches. Such litigation, regulatory investigations and our technical activities intended to prevent future security breaches are likely to require additional management resources and expenditures. If our security measures fail to protect this information adequately or we fail to comply with other rules and regulations, such as the Health Insurance Portability and Accountability Act, the General Data Protection Regulation, or GDPR, the EU-U.S. and Swiss-U.S. Privacy Shield Framework and Principles or applicable credit card association operating rules, we could be liable to both our users for their losses, as well as the vendors under our agreements with them, we could be subject to fines and higher transaction fees, we could face regulatory action, and our users and vendors could end their relationships with us, any of which could harm our business, results of operations and financial condition.

Our internal systems are exposed to the same cybersecurity risks and consequences of a breach as our customers and other enterprises. However, since our business is focused on providing reliably secure products to our customers, we believe that an actual or perceived breach of, or security incident affecting, our internal networks, systems or data could be especially detrimental to our reputation, customer confidence in our products and solutions and our business.

Our industry is intensely competitive, and competitors may succeed in reducing our sales.

Our products face intense competition from many different companies, including but not limited to:

• other online survey providers, such as Google;

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• licensed enterprise feedback software, such as Qualtrics and Medallia; and

• full service market research firms.

These competitors vary in size, and many have significantly greater financial, marketing and product development resources than we have, larger sales and marketing budgets and resources, broader distribution or established relationships or lower labor and research and development costs. We also compete with offline methods of information collection, such as pen-and-paper surveys, forms and applications and telephone surveys, and less-automated methods such as email. Our competitors may devote greater resources and time on developing and testing products and solutions, undertake more extensive marketing campaigns and partnerships, adopt more aggressive pricing policies or otherwise develop more commercially successful products and solutions than we do. Our competitors may have preexisting relationships which required significant upfront investment by the customer, and these customers may prefer to continue existing and established relationships rather than adopt our survey platform. We cannot assure that we will be able to increase or maintain the large user base that we currently enjoy.

There are relatively low barriers to entry into our business. As a result, we are likely to face additional and intense competition from new entrants into the market in the future. There can be no assurance that existing or future competitors will not develop or offer products that provide significant performance, price, speed, creative or other advantages over those offered by us, and this could have an adverse effect on our business. We also operate in a highly fragmented market, and consolidation of our competitors or customers may also adversely affect our business. In addition, historically, our business has enjoyed relatively high margins and growth, which may attract new competition into our markets, including competition from companies employing alternate business models. Loss of existing or future market share to new competitors and increased price competition could substantially harm our business, results of operations and financial condition.

Our business, results of operations and financial condition may fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors.

Our operating results have in the past and could in the future vary significantly from quarter-to-quarter and year-to-year and may fail to match our past performance, our projections or the expectations of securities analysts because of a variety of factors, many of which are outside of our control. Any of these events could cause the market price of our common stock to fluctuate. Factors that may contribute to the variability of our operating results include:

• our ability to attract new users to our survey platform;

• our ability to convert users of our free basic survey product to paying users;

• our ability to retain paying users;

• our ability to maintain and improve our products;

• shifts in the way customers, respondents and users access our websites and products from personal computers to mobile devices;

• the effectiveness of our marketing campaigns, including old strategies that may cease to be effective and the failure of new efforts;

• disruptions or outages in the availability of our websites or products, actual or perceived breaches of privacy and compromises of our customer or respondent data;

• changes in our pricing policies or those of our competitors;

• our ability to increase sales of our products and solutions to new customers and expand sales of additional products and solutions to our existing customers;

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• the size and seasonal variability of our customers’ research and marketing and budgets;

• the extent to which existing customers renew their agreements with us and the timing and terms of those renewals;

• general industry, market and macroeconomic conditions;

• the timing and cost of investing in our technology infrastructure, product initiatives, facilities and international expansion may be greater than we anticipate;

• our needs related to facilities and data centers may change over time and vary from our original forecasts, and the value of the property that we lease or own may fluctuate;

• expenses related to hiring, incentivizing and retaining employees;

• the timing and costs of expanding our sales organization and delays or inability in achieving expected productivity;

• the timing of certain expenditures, including capital expenditures;

• the entrance of new competitors in our market whether by established companies or the entrance of new companies;

• currency exchange rate fluctuations;

• our ability to integrate acquisitions and realize the expected benefit of such acquisitions in a timely manner or at all;

• changes in the price of our subscription plans; and

• changing tax laws and regulations.

Our historical operating results may not be indicative of our future operating results. As our revenue growth rate has slowed, the cyclicality and seasonality in our business have become more pronounced, and we expect that to continue. This has, and will, cause our operating results to fluctuate. Further, our customers were required to renew their subscriptions at a higher price point in 2017 in connection with our changes to our individual user plans. If we do not continue to increase the price of our subscription plans in the future, or if we lose customers as a result of price increases, our revenue could be adversely affected. In addition, global economic concerns continue to create uncertainty and unpredictability and add risk to our future outlook. An economic downturn in any particular region in which we do business or globally could result in reductions in sales of our products, decreased renewals of existing arrangements and other adverse effects that could harm our business, results of operations and financial condition.

We have substantial indebtedness and lease obligations, which reduce our capability to withstand adverse developments or business conditions.

We have incurred substantial indebtedness, and as of June 30, 2018, our total aggregate indebtedness was approximately $322.0 million of principal outstanding. We also have, and will continue to have, significant lease obligations. As of June 30, 2018, our total aggregate obligations under our long-term operating and financing leases was $138.6 million. Our payments on our outstanding indebtedness and lease obligations are significant in relation to our revenue and cash flow, which exposes us to significant risk in the event of downturns in our businesses (whether through competitive pressures or otherwise), our industry or the economy generally, since our cash flows would decrease but our required payments under our indebtedness and lease obligations would not. Economic downturns may impact our ability to comply with the covenants and restrictions in our credit facilities and agreements governing our other indebtedness and lease obligations and may impact our ability to pay or refinance our indebtedness or lease obligations as they come due, which would adversely affect our business, results of operations and financial condition.

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Our overall leverage and the terms of our financing arrangements could also:

• make it more difficult for us to satisfy obligations under our outstanding indebtedness;

• limit our ability to obtain additional financing in the future for working capital, capital expenditures or acquisitions;

• limit our ability to refinance our indebtedness on terms acceptable to us or at all;

• limit our ability to adapt to changing market conditions;

• restrict us from making strategic acquisitions or cause us to make non-strategic divestitures;

• require us to dedicate a significant portion of our cash flow from operations to paying the principal and interest on our indebtedness, thereby limiting the availability of our cash flow to fund future capital expenditures, working capital and other corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and in our industry generally; and

• place us at a competitive disadvantage compared with competitors that have a less significant debt burden.

We may be required to delay recognition of some of our revenue, which may harm our financial results in any given period.

We may be required to delay recognition of revenue for a significant period of time after entering into an agreement due to a variety of factors, including, among other things, whether:

• the transaction involves both current products and products that are under development;

• the customer requires significant modifications, configurations or complex interfaces that could delay delivery or acceptance of our products;

• the transaction involves acceptance criteria or other terms that may delay revenue recognition; or

• the transaction involves performance milestones or payment terms that depend upon contingencies.

Because of these factors and other specific revenue recognition requirements under GAAP, we must have very precise terms in our contracts to recognize revenue when we initially provide access to our survey platform or other products. Although we strive to enter into agreements that meet the criteria under GAAP for current revenue recognition on delivered performance obligations, our agreements are often subject to negotiation and revision based on the demands of our customers. The final terms of our agreements sometimes result in deferred revenue recognition, which may adversely affect our financial results in any given period. In addition, more customers may require extended payment terms, shorter term contracts or alternative licensing arrangements that could reduce the amount of revenue we recognize upon delivery of our other products and could adversely affect our short-term financial results.

Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition. In some instances, we could reasonably use different estimates and assumptions, and changes in estimates are likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates.

Our results of operations may not immediately reflect downturns or upturns in sales because we recognize revenue from our users over the term of their paid subscriptions with us.

We recognize revenue from paid subscriptions to our products and solutions over the terms of the subscription period. Paying users can choose between monthly or annual subscriptions, and customers of

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SurveyMonkey Enterprise make a minimum one-year subscription commitment and are increasingly purchasing multi-year subscriptions. Amounts that have been billed are initially recorded as deferred revenue until the revenue is recognized. As a result, a large portion of our revenue for each quarter reflects deferred revenue from paid subscriptions entered into during previous quarters, and downturns or upturns in subscription sales, or renewals and potential changes in our pricing policies may not be reflected in our results of operations until later periods. Our paid subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as paid subscription revenue from new users is recognized over the applicable subscription term.

If we fail to effectively manage our growth, our business and results of operations could be harmed.

The scope and complexity of our business have also increased significantly. The growth and expansion of our business creates significant challenges for our management, operational and financial resources. In the event of continued growth of our operations or in the number of our third-party relationships, our information technology systems and our internal controls and procedures may not be adequate to support our operations. To effectively manage our growth, we must continue to improve our operational, financial and management processes and systems and to effectively expand, train and manage our employee base. As our organization continues to grow and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products and solutions. This could negatively affect our business performance.

We continue to experience growth in our headcount and operations, which will continue to place significant demands on our management and our operational and financial infrastructure. As of June 30, 2018, approximately 30% of our employees had been with us for less than one year and approximately 20% for more than one year but less than two years. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, and we must maintain the beneficial aspects of our corporate culture. To attract top talent, we have had to offer, and believe we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees. In addition, fluctuations in the price of our common stock may make it more difficult or costly to use equity compensation to motivate, incentivize and retain our employees. We face significant competition for talent from other internet, software and high-growth companies, which include both publicly traded and privately-held companies. The risks of over-hiring, especially given overall macroeconomic risks, or over-compensating employees and the challenges of integrating a growing employee base into our corporate culture are exacerbated by our international expansion. Additionally, because of our growth, we have expanded our operating and financing lease obligations and purchase commitments, which have increased our expenses. We may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business, results of operations and financial condition could be adversely affected.

Additionally, if we do not effectively manage the growth of our business and operations, the quality of our products and solutions could suffer, which could negatively affect our brand, results of operations and overall business. Further, we have made changes in the past, and will likely make changes in the future, to our products that our customers may not like, find useful or agree with. We may also decide to discontinue certain features, products or solutions or charge for certain features, products or solutions that are currently free or increase fees for any of our features, products or solutions. If users are unhappy with these changes, they may decrease their usage of our products or stop using them generally, and in the past we have experienced a decrease in our number of paying users as a result of pricing changes. In addition, they may choose to take other types of action against us, such as organizing petitions or boycotts focused on our company, our website or our products and services, filing claims with the government or other regulatory bodies or filing lawsuits against us. Any of these actions could negatively impact our growth and brand, which would harm our business.

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Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture and our business may be harmed.

We have worked to develop a strong culture around our team, which we refer to as the troop, and which is built on four key pillars of celebrating curiosity, maintaining a collaborative and inclusive work environment, focusing on individual well-being and seeking to positively influence our industry and community. We believe that our culture has been and will continue to be a critical contributor to our success. We expect to continue to hire aggressively as we expand, and we believe our corporate culture has been crucial in our success and our ability to attract highly skilled personnel. If we do not continue to develop our corporate culture or maintain and preserve our core values as we grow and evolve both in the United States and internationally, we may be unable to foster the innovation, curiosity, creativity, focus on execution, teamwork and the facilitation of critical knowledge transfer and knowledge sharing we believe we need to support our growth. Moreover, liquidity available to our employee securityholders following this offering could lead to disparities of wealth among our employees, which could adversely impact relations among employees and our culture in general. Our anticipated headcount growth and our transition from a private company to a public company may result in a change to our corporate culture, which could harm our business.

We depend on our talent to grow and operate our business, and if we are unable to hire, integrate, develop, motivate and retain our personnel, we may not be able to grow effectively.

Our future success depends, in part, on our ability to continue to identify, hire, integrate, develop, motivate and retain top talent, including senior management, engineers, designers, product managers, sales representatives and customer support representatives. Our ability to execute efficiently is dependent upon contributions from all of our employees, in particular our senior management team. As we continue to grow, we cannot guarantee we will continue to attract or retain the personnel we need to maintain our competitive position. In addition to hiring new employees, we must continue to focus on retaining our best talent. Competition for these resources, particularly for engineers, is intense, and competition for the facilities to house our employees is also intense, especially in the San Francisco Bay Area where our headquarters is located. We may need to invest significant amounts of cash and equity for new and existing employees and we may never realize returns on these investments, and we also are investing heavily in our facilities. If we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely impacted, and our business will be harmed. The loss of one or more of our key employees, and any failure to have in place and execute an effective succession plan for key executives, could seriously harm our business. Employees may be more likely to leave us if the shares they own or the shares underlying their equity incentive awards have significantly appreciated or significantly reduced in value. Many of our employees may receive significant proceeds from sales of our equity in the public markets after this offering, which may reduce their motivation to continue to work for us. Additionally, if our senior management team, including any new hires that we may make, fails to work together effectively and to execute on our plans and strategies on a timely basis, our business could be harmed.

In addition, our future also depends on the continued contributions of our senior management team and other key personnel, each of whom would be difficult to replace. Although we have entered into employment agreements or offer letters with our key employees, these agreements have no specific duration and constitute at-will employment, and we do not maintain key person life insurance for any employee. In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business. If our senior management team, including any new hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business, results of operations and financial condition could be harmed.

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Our products and solutions and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.

Our products and solutions and internal systems rely on software that is highly technical and complex. In addition, our products and solutions and internal systems depend on the ability of our software to store, retrieve, process and manage immense amounts of data. Our software has contained, and may now or in the future contain, undetected errors, bugs or vulnerabilities. Some errors in our software may only be discovered after the code has been released for external or internal use. Errors or other design defects within our software may result in a negative experience for our users, delay product introductions or enhancements or result in measurement or other errors. We also rely on third-party software that may contain errors or bugs. Any actual or perceived errors, failures, vulnerabilities, bugs or defects discovered in our software or third-party software we use could result in damage to our reputation, cause a reduction in revenue or delay in market acceptance of our products, require us to issue refunds to our customers or expose us to claims for damages, cause us to lose existing users or make it more difficult to attract new users, divert our development resources or require us to make extensive changes to our survey platform, any of which could adversely affect our business, results of operations and financial condition. The costs incurred in correcting such defects or errors may be substantial and could harm our results of operations and financial condition. Moreover, the harm to our reputation and legal liability related to such errors or defects may be substantial and could harm our business.

We depend on our infrastructure and third-party data centers, and any disruption in the operation of these facilities or failure to renew the services could impair the delivery of our products and solutions and adversely affect our business.

We currently deploy our products and solutions and serve all of our users using a combination of our own custom-built infrastructure that we lease and operate in co-location facilities and third-party data center services such as Amazon Web Services. While we typically control and have access to the servers we operate in co-location facilities and the components of our custom-built infrastructure that are located in those co-location facilities, we control neither the operation of these facilities nor our third-party service providers. Furthermore, we have no physical access or control over the services provided by Amazon Web Services. Consequently, we may be subject to service disruptions as well as failures to provide adequate services for reasons that are outside our direct control.

Data center leases and agreements with the providers of data center services expire at various times. The owners of these data centers and providers of these data center services may have no obligation to renew their agreements with us on commercially reasonable terms or at all. Problems faced by data centers, with our third-party data center service providers, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their users, including us, could adversely affect the experience of our users. Our third-party data center operators could decide to close their facilities or cease providing services without adequate notice. In addition, any financial difficulties, such as bankruptcy, faced by our third-party data centers operators or any of the service providers with whom we or they contract may have negative effects on our business, the nature and extent of which are difficult to predict. In addition, these facilities may be located in areas prone to natural disasters and may experience events such as earthquakes, floods, fires, power loss, telecommunication failures and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct. Any damage to, or failure of, our systems generally, or those of the third-party providers, could result in interruptions in use of our products that may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their services with us and adversely affect our ability to attract new customers and retain existing customers.

If the data centers and service providers that we use are unable to keep up with our growing needs for capacity, or if we are unable to renew our agreements with data centers and service providers on commercially reasonable terms, we may be required to transfer servers or content to new data centers or engage new service

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providers, and we may incur significant costs and possible service interruption in connection with doing so. In addition, if we do not accurately plan for our data center capacity requirements and we experience significant strains on our data center capacity, we may experience delays and additional expenses in arranging new data centers, and our users could experience service outages that may subject us to financial liabilities, result in customer losses and harm our business. Any changes in third-party service levels at data centers or any real or perceived errors, defects, disruptions or other performance problems with our products and solutions could harm our reputation and may result in damage to, or loss or compromise of, our users’ content. Interruptions in our products and solutions might, among other things, reduce our revenue, cause us to issue refunds to users, subject us to potential liability, harm our reputation or our ability to retain customers.

We collect, process, store, share, disclose and use personal information and other data, which subjects us to governmental regulations and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business.

We collect, process, store, share, disclose and use information from and about our customers, respondents and users, including personal information and other data. There are numerous laws around the world regarding privacy and security, including laws regarding the collection, processing, storage, sharing, disclosure, use and security of personal information and other data from and about our customers, respondents and users. The scope of these laws is changing, subject to differing interpretations, may be costly to comply with, and may be inconsistent among countries and jurisdictions or conflict with other rules.

We strive to comply with applicable laws, policies and legal obligations relating to privacy and data protection and are subject to the terms of our privacy policies and privacy-related obligations to third parties. However, these obligations may be interpreted and applied in new ways and/or in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Data privacy and security are active areas, and new laws and regulations are likely to be enacted.

Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers, respondents, users or other third parties, our data disclosure and consent obligations or our privacy or security-related legal obligations, or any compromise of security that results in the unauthorized disclosure, transfer or use of personal or other information, which may include personally identifiable information or other data, may result in governmental enforcement actions, litigation or public statements critical of us by consumer advocacy groups, competitors, the media or others and could cause our users to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties we work with, such as customers, partners, vendors or developers, violate applicable laws, our policies or other privacy or security-related obligations, such violations may also put our users’ information at risk and could in turn have an adverse effect on our business. Governmental agencies may also request or take member or customer data for national security or informational purposes, and also can make data requests in connection with criminal or civil investigations or other matters, which could harm our reputation and our business. Additionally, our compliance with the laws of one jurisdiction may be in contravention to laws or regulations that we are subject to in other jurisdictions

In addition, there has been increased uncertainty around the legality of various mechanisms for personal data transfers from the European Union to the United States, which may have a significant impact on the transfer of data from the European Union to U.S. companies, including us. For example, we may have to require some of our vendors who process personal data to take on additional privacy and security obligations, and some may refuse, causing us to incur potential disruption and expense related to our business processes. If our policies and practices, or those of our vendors, are, or are perceived to be, insufficient or if our users and customers have concerns regarding the transfer of data from the European Union to the United States, we could be subject to enforcement actions or investigations by the Federal Trade Commission, individual EU Data Protection Authorities or lawsuits by private parties, use of our products could decline and our business could be negatively impacted. There is also uncertainty as to whether the certain legal mechanisms for the lawful transfer of data from the European Union to the United States will withstand legal challenges. If the

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mechanisms on which we rely for the transfer of data are found to be invalid, our business would be substantially impacted, as key agreements may need to be renegotiated, customers may lose confidence in our ability to transfer data legally from the European Union to the United States and we may be subject to enforcement actions or investigations by the Federal Trade Commission or EU Data Protection Authorities.

Public scrutiny of internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our products to our customers, thereby harming our business.

The regulatory framework for privacy and security issues worldwide is evolving and is likely to remain in flux for the foreseeable future. Various government and consumer agencies have also called for new regulation and changes in industry practices. Practices regarding the registration, collection, processing, storage, sharing, disclosure, use and security of personal and other information by companies offering an online service like our survey platform and other solutions have recently come under increased public scrutiny.

For example, the European Union has enacted GDPR, which became effective in May 2018. GDPR requires greater compliance efforts for companies with users and operations in the European Union and provides for fines of up to 4% of global annual revenue for noncompliance.

In the United States, the federal government and many state governments have reviewed and are reviewing the need for greater regulation of the collection, processing, storage, sharing, disclosure, use and security of information concerning consumer behavior with respect to online services, including regulations aimed at restricting certain targeted advertising practices and collection and use of data from mobile devices. This review may result in new laws or the promulgation of new regulations or guidelines. For example, the State of California and other states have passed laws relating to disclosure of companies’ practices with regard to Do-Not-Track signals from internet browsers, the ability to delete information of minors and new data breach notification requirements. California has also adopted privacy guidelines with respect to mobile applications and recently enacted legislation, the California Consumer Privacy Act, or CCPA, that will, among other things, require covered companies to provide new disclosures to California consumers, and afford such consumers new abilities to opt-out of certain sales of personal information, when it goes into effect on January 1, 2020. Legislators have stated that they intend to propose amendments to the CCPA before it goes into effect, and it remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. We cannot yet predict the impact of the CCPA on our business or operations, but it may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

In June 2016, the United Kingdom voted to leave the European Union, commonly referred to as “Brexit,” which could also lead to further legislative and regulatory changes. In March 2017, the United Kingdom began the process to leave the EU by April 2019. A Data Protection Bill that substantially implements GDPR has been enacted, effective in May 2018. It remains unclear, however, how United Kingdom data protection laws or regulations will develop in the medium to longer term and how data transfers to and from the United Kingdom will be regulated.

Outside the European Union and the United States, a number of countries have adopted or are considering privacy laws and regulations that may result in greater compliance efforts. In addition, government agencies and regulators have reviewed, are reviewing and will continue to review the personal data practices of certain online companies. If we are unable to comply with any such reviews or decrees that result in recommendations or binding changes, or if the recommended changes result in degradation of our products, our business could be harmed.

Our business, including our ability to operate and expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, mobile

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applications, survey platform, solutions, features or our privacy policies. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly gather and use data from data subjects and help our customers collect and analyze data from survey respondents. Therefore, our business could be harmed by any significant change to applicable laws, regulations or industry standards or practices regarding the storage, use or disclosure of data our customers or respondents share with us, or regarding the manner in which the express or implied consent of consumers for such collection, analysis and disclosure is obtained. Such changes may require us to modify our survey platform, features and other products, possibly in a material manner, and may limit our ability to develop new products, solutions and features that make use of the data that we collect.

Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.

We are subject to a variety of laws in the United States and abroad, including laws regarding privacy, data protection, data security, data retention and consumer protection, accessibility, sending and storing of electronic messages (and related traffic data where applicable), human resource services, employment and labor laws, workplace safety, intellectual property and the provision of online payment services, including credit card processing, consumer protection laws, anti-bribery and anti-corruption laws, import and export controls, federal securities laws and tax regulations, which are continuously evolving and developing. The scope and interpretation of the laws and other obligations that are or may be applicable to us, our vendors or partners or certain groups of our users are often uncertain and may be conflicting, particularly laws and other obligations outside of the United States. For example, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement and other theories based on the nature and content of the materials searched, the advertisements posted or the content provided by users.

In addition, regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning privacy, spam, data storage, data protection, content regulation, cybersecurity, government access to personal information and other matters that may be applicable to our business. Compliance with these laws may require substantial investment or may provide technical challenges for our business. More countries are enacting and enforcing laws related to the appropriateness of content and enforcing those and other laws by blocking access to services that are found to be out of compliance. It is also likely that as our business grows, evolves and an increasing portion of our business shifts to mobile and our solutions are used in a greater number of countries and additional groups, we will become subject to laws and regulations in additional jurisdictions. Users of our site and our solutions could also abuse or misuse our survey platform and other products in ways that violate laws or cause damage to our business. It is difficult to predict how existing laws will be applied to our business and whether we will become subject to new laws or legal obligations that will impact our business.

If we are not able to comply with these laws or other legal obligations, or if we or our vendors or users become liable under these laws or legal obligations, or if our products or services are suspended or blocked, we could be directly harmed, and we may be forced to implement new measures to reduce exposure to this liability. This may require us to expend substantial resources or to discontinue certain solutions, which would negatively affect our business, results of operations and financial condition. We could also be subject to investigations, enforcement actions and sanctions, mandatory changes to our products and solutions, disgorgement of profits, fines and damages, civil and criminal penalties or injunctions, claims for damages, termination of contracts and loss of intellectual property rights. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business, results of operations and financial condition.

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We are subject to export and import control laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate such laws and regulations.

We are subject to U.S. export controls and sanctions regulations that prohibit the shipment or provision of certain products and solutions to certain countries, governments and persons targeted by U.S. sanctions. While we take precautions to prevent our products and services from being exported or used in violation of these laws, including implementing IP address blocking, we cannot guarantee that the precautions we take will prevent violations of export control and sanctions regulations. In March 2018, we discovered that three of our paying users were located in Crimea and had avoided our screening measures by incorrectly identifying their location. Although these accounts have been cancelled, this use of platform was likely in violation of U.S. sanctions regulations. In June 2018, we filed a Voluntary Self-Disclosure with the Office of Foreign Assets Control, or OFAC, concerning these potential violations. In July 2018, we received a cautionary letter from OFAC stating that it would not pursue any penalties at this time. If in the future we are found to be in violation of U.S. sanctions or export control laws, it could result in substantial fines and penalties for us and for the individuals working for us.

In addition, various countries regulate the import and export of certain encryption and other technology, including import and export permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our products or could limit our users’ ability to access our survey platform in those countries. Changes in our products, or future changes in export and import regulations, may prevent our users with international operations from deploying our products globally or, in some cases, prevent the export or import of our products to certain countries, governments or persons altogether. Any change in export or import regulations, economic sanctions or related legislation or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell subscriptions to our products to, existing or potential users with international operations. Any decreased use of our survey platform or limitation on our ability to export or sell our products would likely adversely affect our business, results of operations and financial condition.

Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.K. Bribery Act and other anti-corruption, anti-bribery and anti-money laundering laws in various jurisdictions both domestic and abroad. These laws generally prohibit us and our employees from improperly influencing government officials or commercial parties in order to obtain or retain business, direct business to any person or gain any advantage. The FCPA, U.K. Bribery Act and similar applicable anti-bribery and anti-corruption laws also prohibit our third-party business partners, representatives and agents from engaging in corruption and bribery. We may be held liable for the acts of our third-party business partners, representatives and agents. To that end, in addition to our own salesforce, we leverage third parties to sell our products and conduct our business abroad. We and our third-party business partners, representatives and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, channel partners and agents, even if we do not explicitly authorize such activities. While we have policies and procedure to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible. Any violation of the FCPA or other applicable anti-bribery, anti-corruption laws and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, severe criminal or civil sanctions or suspension or debarment from U.S. government contracts, substantial diversion of management’s attention, drop in stock price or overall adverse consequences to our business, all of which may have an adverse effect on our reputation, business, results of operations and financial condition.

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Our international operations involve risks that could increase our expenses, adversely affect our operating results and require increased time and attention of our management.

We derive a portion of our revenue from customers located outside of the United States and we have significant operations outside of the United States, including engineering, sales and customer support. We plan to expand our international operations, but such expansion is contingent upon the financial performance of our existing international operations as well as our identification of growth opportunities.

Our international operations are subject to risks in addition to those our domestic operations face, including:

• potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced;

• requirements of foreign laws and other governmental controls, including privacy, data protection and transfer, trade and labor restrictions and related laws that reduce the flexibility of our business operations;

• local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the FCPA, U.K. Bribery Act and other anti-corruption laws and regulations;

• restrictions on our ability to repatriate cash from our international subsidiaries or to exchange cash in international subsidiaries into cash available for use in the United States;

• fluctuations in currency exchange rates, economic instability and inflationary conditions could reduce our customers’ ability to obtain financing for software products and solutions or that could make our survey platform and solutions more expensive or could increase our costs of doing business in certain countries;

• limitations on future growth or inability to maintain current levels of revenue from international sales if we do not invest sufficiently in our international operations, or execute properly on such investments;

• longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable;

• difficulties in staffing, managing and operating our international operations, including difficulties related to administering our equity incentive plan in some foreign countries;

• difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations;

• seasonal reductions in business activity in the summer months in Europe and in other periods in other countries;

• costs and delays associated with developing software and providing support in multiple languages; and

• political unrest, war or terrorism, or regional natural disasters, particularly in areas in which we have facilities.

The level of corporate tax from sales to our non-U.S. customers is generally less than the level of tax from sales to our U.S. customers. This benefit is contingent upon existing tax regulations in the U.S and in the countries in which our international operations are located. Future changes in domestic or international tax regulations could adversely affect our ability to continue to realize these tax benefits.

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If currency exchange rates fluctuate substantially in the future, the results of our operations, which are reported in U.S. dollars, could be adversely affected.

We conduct our business in over 190 countries and territories around the world and a significant portion of our transactions outside of the United States are denominated in foreign currencies. As we continue to expand our international operations, we become more exposed to the effects of fluctuations in currency exchange rates. We incur expenses for employee compensation and other operating expenses at our non-U.S. locations in the local currency, and accept payment from customers in currencies other than the U.S. dollar. Since we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars, we face exposure to fluctuations in currency exchange rates and any increase in the value of the U.S. dollar against these foreign currencies could cause our revenue to decline relative to our costs, thereby decreasing our operating margins. Further, we do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. Consequently, exchange rate fluctuations between the U.S. dollar and other currencies could have a material impact on our profitability and hinder our ability to predict our future results and earnings. For example, because we recognize revenue over time, exchange rate fluctuations at one point in time may have a negative impact in future quarters. There can be no assurance that we will be successful in managing our exposure to currency exchange rate risks, which may adversely affect our business, results of operations and financial condition. Additionally, because we conduct business in currencies other than U.S. dollars, but report our results of operations in U.S. dollars, we also face remeasurement exposure to fluctuations in currency exchange rates, which could hinder our ability to predict our future results and earnings and could materially impact our results of operations. From time to time, we may enter into foreign currency derivative contracts to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. During 2016 and 2017 and the six months ended June 30, 2017 and 2018, we did not have any derivative financial instruments.

Expansion into international markets is important for our growth, and as we expand internationally, we will face additional business, political, regulatory, operational, financial and economic risks, any of which could increase our costs and hinder such growth.

Continuing to expand our business to attract users in countries other than the United States is a critical element of our business strategy. An important part of targeting international markets is increasing our brand awareness and developing offerings that are localized and customized for the users in those markets. We have a limited operating history as a company outside of the United States. We expect to continue to devote significant resources to international expansion through acquisitions and partnerships, the establishment of additional offices and increasing our foreign language offerings. Our ability to expand our business and to attract talented employees and users in an increasing number of international markets will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute resolution systems, regulatory systems and commercial infrastructures. Expanding our international focus may subject us to risks that we have not faced before or increase risks that we currently face, including but not limited to risks associated with recruiting and retaining talented and capable management and employees in foreign countries; challenges caused by distance, time zone, language and cultural differences; developing and customizing products and solutions that appeal to the tastes and preferences of users in international markets; competition from local survey providers with significant market share in those markets and with a better understanding of user preferences; reliance on third parties and partnerships to provide product support and services that we do not resource directly outside of the United States, such as panelists for SurveyMonkey Audience; protecting and enforcing our intellectual property rights; the inability to extend proprietary rights in our brand, content or technology into new jurisdictions; compliance with applicable foreign laws and regulations, including privacy laws and laws relating to content; credit risk and higher levels of payment fraud; currency exchange rate fluctuations; protectionist laws and business practices that favor local businesses in some countries; foreign tax consequences; foreign exchange controls or U.S. tax restrictions that might restrict or prevent us from repatriating income earned in countries outside of the United States; political,

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economic and social instability; higher costs associated with doing business internationally; export or import regulations; and trade and tariff restrictions.

Entering new international markets will be expensive, our ability to successfully gain market acceptance in any particular market is uncertain and the distraction of our senior management team could harm our business, results of operation and financial condition.

We derive, and expect to continue to derive, a substantial majority of our revenue from a limited number of software products.

We derive, and expect to continue to derive, a substantial majority of our revenue from our paid individual and enterprise subscription offerings to our survey platform. As such, the market acceptance of our survey platform is critical to our success. Demand for subscription access to our survey platform and for our other products and solutions is affected by a number of factors, many of which are beyond our control, such as continued market acceptance of our survey platform by customers for existing and new use cases, the timing of development and release of new products, solutions, features and functionality that are lower cost alternatives introduced by us or our competitors, technological changes and developments within the markets we serve and growth or contraction in our addressable markets. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of our survey platform, our business, results of operations and financial condition could be harmed.

If internet search engines’ methodologies are modified or our search result page rankings decline for other reasons, use and engagement by users could decline.

We depend in part on various internet search engines to direct a significant portion of our traffic to our website. Similarly, we depend on providers of mobile application “store fronts” to allow users to locate and download our mobile applications that enable our product. Our ability to maintain the number of visitors directed to our website and users of our survey platform is not entirely within our control. Our competitors’ search engine optimization, or SEO, efforts may result in their websites receiving a higher search engine results page ranking than ours, or internet search engines could revise their methodologies in an attempt to improve their search results, which could adversely affect the placement of our search result page ranking. If search engine companies modify their search algorithms in ways that are detrimental to our new user growth or in ways that make it harder for our users to use our website, if we fail to successfully manage changes in SEO and social media traffic or if our competitors’ SEO efforts are more successful than ours, overall growth in our user base could slow, user engagement could decrease and we could lose existing users. These modifications may be prompted by search engine companies entering the online survey market or aligning with competitors. Additionally, our competitors may adopt search engine marketing tactics such as bidding on our terms in order to drive up our costs. This could make it more expensive to acquire new customers using our current marketing methods. Our website has experienced fluctuations in search engine results page rankings in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of users directed to our websites would harm our business, results of operations and financial condition.

Our business depends on continued and unimpeded access to the internet and mobile networks by us and our users on personal computers and mobile devices.

Our survey platform and solutions depend on the ability of our customers, respondents and users to access our products through their personal computers and mobile devices. Currently, this access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies and government-owned service providers, any of whom could take actions that degrade, disrupt or increase the cost of user access to our products, which would, in turn, negatively impact our business. In addition, internet or network access could be disrupted by other third parties. Further, the adoption of any laws or regulations that adversely affect

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the growth, popularity or use of the internet and mobile networks, including laws limiting internet neutrality, could decrease the demand for our paid subscription offerings or the usage of our survey platform and increase our cost of doing business.

If we are unable to effectively operate on mobile devices, our business could be adversely affected.

Our customers and respondents are increasingly accessing our products on mobile devices. We are devoting valuable resources to solutions related to monetization of mobile usage, and cannot assure you that these solutions will be successful. If the mobile solutions we have developed do not meet the needs of current prospective customers or respondents, or if our solutions are difficult to access, they may reduce their usage of our products or cease using our products altogether and our business could suffer. Additionally, we are dependent on the interoperability of our products with popular mobile operating systems, networks and standards that we do not control, such as Android and iOS operating systems, and any changes in such systems and terms of service that degrade our solutions’ functionality or give preferential treatment to competitive products could adversely affect traffic and monetization on mobile devices. We may not be successful in maintaining and developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks or standards. Each manufacturer or distributor may establish unique technical standards for its devices, and our products may not work or be easily accessible or viewable on these devices as a result. Some manufacturers may also elect not to include our products on their devices, or we may have difficulty preparing or loading our applications in app stores. As new devices and products are continually being released, it is difficult to predict the challenges we may encounter in developing versions of our solutions for use on these alternative devices. If we are unable to successfully implement monetization strategies for our solutions on mobile devices, or if these strategies are not as successful as our offerings for personal computers or if we incur excessive expenses in this effort, our business, results of operations and financial condition would be negatively affected.

If we are unable to successfully implement monetization strategies for our solutions on mobile devices, or these strategies are not as successful as our offerings for personal computers, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.

Failure to protect or enforce our intellectual property rights could harm our business and results of operations.

We regard the protection of our trade secrets, copyrights, trademarks, trade dress, databases, domain names and patents as critical to our success. We strive to protect our intellectual property rights by relying on federal, state and common law rights and other rights provided under foreign laws. These laws are subject to change at any time and could further restrict our ability to protect our intellectual property rights. In addition, the existing laws of certain foreign countries in which we operate may not protect our intellectual property rights to the same extent as do the laws of the United States. We also have a practice of entering into confidentiality and invention assignment agreements with our employees and contractors, and often enter into confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information. In addition, from time to time we make our technology available to others under license agreements, including open source license agreements. However, these contractual arrangements and the other steps we have taken to protect our intellectual property rights may not prevent the misappropriation of our proprietary information, infringement of our intellectual property rights or deter independent development of similar or competing technologies by others and may not provide an adequate remedy in the event of such misappropriation or infringement.

Obtaining and maintaining effective intellectual property rights is expensive, including the costs of defending our rights. We are seeking to protect certain of our intellectual property rights through filing applications for copyrights, trademarks, patents and domain names in a number of jurisdictions, a process that is expensive and may not be successful in all jurisdictions. Even where we have such rights, they may later be

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found to be unenforceable or have a limited scope of enforceability. In addition, we may not seek to pursue such protection in every location. In particular, we believe it is important to maintain, protect and enhance our brands. Accordingly, we pursue the registration of domain names and our trademarks and service marks in the United States and in many locations outside of the United States. We have already and may, over time, increase our investment in protecting innovations through investments in patents and similar rights, and this process is expensive and time-consuming.

Litigation may be necessary to enforce our intellectual property rights, protect our proprietary rights or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and results of operations. We may also incur significant costs in enforcing our trademarks against those who attempt to imitate our “SurveyMonkey” brand and other valuable trademarks and service marks.

In addition, we have chosen to make certain of our technology available under open source licenses that allow others to use the technology without payment to us. While we hope to benefit from these activities by having access to others’ useful technology under open source licenses, there is no assurance that we will receive the business benefits we expect.

If we fail to maintain, protect and enhance our intellectual property rights, our business, results of operations and financial condition may be harmed and the market price of our common stock could decline.

We have relationships with third parties to provide, develop and create applications that integrate with our products, and our business could be harmed if we are not able to continue these relationships.

We use software and services licensed and procured from third parties to develop and offer our survey platform and other products. We may need to obtain future licenses and services from third parties to use intellectual property and technology associated with the development of our products, which might not be available to us on acceptable terms or at all. Any loss of the right to use any software or services required for the development and maintenance of our products could result in delays in the provision of our products until equivalent technology is either developed by us or, if available from others, is identified, obtained and integrated, which could harm our business. Any errors or defects in third-party software or services could result in errors or a failure of our products, which could harm our business, results of operations and financial condition.

We also depend on our ecosystem of developers to create applications that will integrate with our survey platform. We offer prebuilt integrations, data portability and single sign-on identity with applications, such as those offered by Salesforce, Marketo, Oracle, Microsoft, Google and Slack, as well as open APIs and configurable integrations. Approximately 17,000 apps have been created using our APIs including applications in sales and marketing, productivity and collaboration, social and communications and analytics. Our competitors may be effective in providing incentives to third parties to favor their survey platform, or to prevent or reduce subscriptions to our survey platform. Our reliance on this ecosystem of developers creates certain business risks relating to the quality of the applications built using our application programming interface, including product interruptions of our survey platform from these applications, lack of product support for these applications, our reputation being harmed if the applications do not function as intended and possession of intellectual property rights associated with these applications. We may not have the ability to control or prevent these risks. As a result, issues relating to these applications could adversely affect our brand, reputation, business, results of operations and financial condition.

If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our results of operations may suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.

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Our use of open source software could negatively affect our ability to offer and sell subscriptions to our products and subject us to possible litigation.

A portion of the technologies we use incorporates open source software, and we may incorporate open source software in the future. Open source software is generally licensed by its authors or other third parties under open source licenses. The terms of many open source licenses have not been interpreted by United States or other courts, and these licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our products. These licenses may require us to offer our products that incorporate such open source software for no cost, that we make publicly available source code for modifications or derivative works we create based upon, incorporating or using the open source software, and/or that we license such modifications or derivative works under the terms of the particular open source license. We may face claims from others claiming ownership of open source software or patents related to that software, rights to our intellectual property or breach of open source license terms, including a demand for release of material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation, which could be costly to defend, require us to purchase a costly license, require us to establish additional specific open source compliance procedures, or require us to devote additional research and development resources to remove open source elements from or otherwise change our solutions, any of which would have a negative effect on our business and results of operations. In addition, if we were to combine our own software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of some software that would be valuable to keep as a trade secret and/or not make available for use by others. Any of the foregoing could disrupt and harm our business, results of operations and financial condition.

We may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business and results of operations.

We may be party to lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We may face allegations, lawsuits and regulatory inquiries, audits and investigations regarding data privacy, security, labor and employment, consumer protection and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights and other rights. We may also face allegations or litigation related to our acquisitions, securities issuances or our business practices, including public disclosures about our business. Litigation and regulatory proceedings, and particularly the patent infringement and class action matters we could face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products or require us to stop offering certain features, all of which could negatively impact our user and revenue growth. We may also become subject to periodic audits, which would likely increase our regulatory compliance costs and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.

The results of regulatory proceedings, litigation, claims and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our reputation, business, results of operations, financial condition and the market price of our common stock.

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The intended tax efficiency of our corporate structure and intercompany arrangements depend on the interpretation and application of the tax laws of various jurisdictions and on how we operate our business, and changes to our effective tax rate could adversely impact our results.

Our corporate structure and intercompany arrangements, including the manner in which we develop and use our intellectual property and the transfer pricing of our intercompany transactions, are intended to optimize business efficiency as well as reduce our worldwide effective tax rate. The tax laws of various jurisdictions, including the United States and the other jurisdictions in which we operate, are subject to change, and their application to our international business activities is subject to interpretation and depends on our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing developed technology or for transfer pricing on intercompany arrangements, or they may make a determination that the manner in which we operate results in our business not achieving the intended tax consequences. This could increase our worldwide effective tax rate and harm our results of operations and financial condition. Our effective tax rate could be adversely affected by several other factors, many of which are outside of our control, such as: increases in expenses that are not deductible for tax purposes, the tax effects of restructuring charges or purchase accounting for acquisitions, increases in withholding taxes, changes related to our ability to ultimately realize future benefits attributed to our deferred tax assets, including those related to other-than-temporary impairment, and a change in our decision to indefinitely reinvest foreign earnings. Further, we periodically undergo review and audit by both domestic and foreign tax authorities and expect such actions to continue in the future. Any adverse outcome of such a review or audit could have a negative effect on our results of operations and financial condition.

The enactment of legislation implementing changes in the U.S. taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies in jurisdictions outside of the United States could materially impact our results of operations and financial condition.

Changes to U.S. tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to U.S. tax laws that may be enacted in the future, could impact the tax treatment of our foreign earnings and adversely impact our effective tax rate. On December 22, 2017, the legislation commonly referred to as the Tax Cuts and Jobs Act of 2017, or the Tax Act, became law, and significantly reformed the Internal Revenue Code of 1986, as amended, or the Code. The Tax Act, among other things, includes changes to U.S. federal tax rates and the taxation of foreign earnings, imposes significant additional limitations on the deductibility of interest and the use of net operating losses generated in tax years beginning after December 31, 2017, allows for the immediate expensing of certain capital expenditures and puts into effect the migration from a “worldwide” system of taxation to a territorial system. We continue to examine the impact the Tax Act may have on our business. The Tax Act could have adverse impacts on our business, cash flows, results of operations or financial condition. Due to the expanding scale of our international business activities, any changes in the U.S. or international taxation of such activities may increase our worldwide effective tax rate and harm our business, results of operations and financial condition.

Our operating results may be harmed if we are required to collect sales or other related taxes on subscriptions to our products in jurisdictions where we have not historically done so.

We collect sales, use, value-added and other transaction taxes as part of our subscription agreements in a number of jurisdictions. One or more states or countries may seek to impose incremental or new sales, use, value added or other tax collection obligations on us, including for past sales by us or our resellers and other partners. A successful assertion by a state, country or other jurisdiction that we should have been or should be collecting additional sales, use, value added or other taxes on our products could, among other things, result in substantial tax liabilities for past sales, create significant administrative burdens for us, discourage users from utilizing our products or otherwise harm our business, results of operations and financial condition.

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We have a history of net losses, we anticipate increasing expenses in the future and we may not be able to achieve or maintain profitability.

We have incurred net losses on an annual basis since our reincorporation. We incurred net losses of approximately $76.4 million, $24.0 million, $19.1 million and $27.2 million during 2016 and 2017 and the six months ended June 30, 2017 and 2018, respectively, and we had an accumulated deficit of approximately $204.8 million as of June 30, 2018. In addition, we have granted RSUs which will vest upon the satisfaction of both a service condition and a Performance Vesting Condition, which we expect to be satisfied upon the effectiveness of this offering. As of June 30, 2018, no stock-based compensation expense had been recognized for these RSUs because the Performance Vesting Condition was not probable. In the quarter in which this offering is completed, we will begin recording stock-based compensation expense. If this offering had been completed by June 30, 2018, we would have recorded $80.9 million of cumulative stock-based compensation expense related to these RSUs on that date. Following the completion of this offering, the stock-based compensation expense related to these RSUs and other outstanding equity awards may have a negative impact on our ability to achieve profitability on a GAAP basis. As we strive to grow our business, we expect expenses to increase in the near term, particularly as we continue to make investments to scale our business. For example, we are actively investing in our sales team, and we will need an increasing amount of technical infrastructure to continue to satisfy the needs of our user base. We also expect our research and development expenses to increase as we plan to continue to hire employees for our engineering, product and design teams to support these efforts. In addition, we will incur additional general and administrative expenses to support both our growth as well as our transition to being a publicly traded company. These investments may not result in increased revenue or growth in our business. We may encounter unforeseen or unpredictable factors, including unforeseen operating expenses, complications or delays, which may result in increased costs. Furthermore, it is difficult to predict the size and growth rate of our market, user demand for our survey platform, the entry of competitive survey platforms or other products or the success of existing competitive products and solutions. As a result, we may not achieve or maintain profitability in future periods. If we fail to grow our revenue sufficiently to keep pace with our investments and other expenses, our business, results of operations and financial condition would be adversely affected.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2017, we had $102.4 million of federal and $48.1 million of state net operating loss carryforwards available to reduce future taxable income, which have begun to expire in 2018. As of December 31, 2017, we had federal research and development credits of $5.9 million which will begin to expire in 2032; state research and development credits of $5.8 million which will carryforward indefinitely; and foreign research and development credits of $0.5 million which will begin to expire in 2026. Under Sections 382 and 383 of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Based on analysis performed, we have concluded that approximately $37 million of net operating loss carryforwards from companies we have previously acquired are subject to limitation under Section 382 of the Code. At this time, for our non-acquired net operating losses, we have not completed a study to assess whether an ownership change under Section 382 of the Code has occurred, or whether there have been multiple ownership changes since our formation. We may have experienced various ownership changes, as defined by the Code, as a result of past financing transactions (or other activities), and we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, including this offering, some of which may be outside of our control. Accordingly, our ability to utilize the aforementioned carryforwards may be limited.

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Our business could be disrupted by catastrophic events and man-made problems, such as power disruptions, data security breaches and terrorism.

Our systems are vulnerable to damage or interruption from the occurrence of any catastrophic event, including earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunction, cyber-attack, war, terrorist attack or incident of mass violence, which could result in lengthy interruptions in the use of our products. In particular, our U.S. headquarters, certain of the facilities we lease to house our computer and telecommunications equipment and some of the data centers we utilize are located in the San Francisco Bay Area, a region known for seismic activity, and our insurance coverage may not compensate us for losses that may occur in the event of an earthquake or other significant natural disaster. In addition, acts of terrorism, including malicious internet-based activity, could cause disruptions to the Internet or the economy as a whole. Even with our disaster recovery arrangements, use of our products could be interrupted. If our systems were to fail or be negatively impacted as a result of a natural disaster or other event, our ability to deliver products and solutions to our users would be impaired or we could lose critical data. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business, results of operations, financial condition and reputation would be harmed.

We have implemented a disaster recovery program that allows us to move website traffic to a backup data center in the event of a catastrophe. This allows us the ability to move traffic in the event of a problem, and the ability to recover in a short period of time. However, to the extent our disaster recovery program does not effectively support the movement of traffic in a timely or complete manner in the event of a catastrophe, our business and results of operations may be harmed.

We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to our business, results of operations and financial condition that may result from interruptions in our product use as a result of system failures.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features, products and solutions, or enhance our existing survey platform, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we have engaged and may continue to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

Acquisitions and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact our business, results of operations and financial condition.

In the past, we have acquired a number of companies including MarketTools (Zoomerang), Fluidware and TechValidate, and we may in the future make acquisitions to add employees, complementary companies, products, solutions, technologies or revenue. These transactions could be material to our results of operations and financial condition. We also expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The identification of suitable acquisition candidates can be difficult,

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time-consuming and costly, and we may not be able to complete acquisitions on favorable terms, if at all. The process of integrating an acquired company, business or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The areas where we face risks include:

• loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture, as well as reputational harm if integration is not successful;

• diversion of management time and focus from operating our business to addressing acquisition integration challenges;

• implementation or remediation of controls, procedures and policies at the acquired company;

• integration of the acquired company’s accounting, human resource and other administrative systems, and coordination of product, engineering and sales and marketing function;

• assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;

• failure to successfully further develop the acquired technology or realize our intended business strategy;

• failure to find commercial success with the products or services of the acquired company;

• difficulty of transitioning the acquired technology onto our existing survey platforms and maintaining the security standards for such technology consistent with our other products and solutions;

• failure to successfully onboard customers or maintain brand quality of acquired companies;

• liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;

• failure to generate the expected financial results related to an acquisition on a timely manner or at all; and

• failure to accurately forecast the impact of an acquisition transaction.

These risks or other problems encountered in connection with our acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities and adversely affect our business generally. For example, following our acquisition of Renzu in May 2015, we subsequently determined that its mobile measurement and analytics product line was not a strategic fit and we implemented a plan to wind down the operations.

Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses or write-offs of goodwill, any of which could harm our financial condition. In addition, any acquisitions we announce could be viewed negatively by users, marketers, developers, partners or investors.

We are an “emerging growth company,” and our election to comply with the reduced disclosure requirements as a public company may make our common stock less attractive to investors.

For so long as we remain an “emerging growth company,” as defined in the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, being required to provide fewer years of audited financial statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden

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parachute payments not previously approved. We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify as a large accelerated filer, with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. In addition, the JOBS Act also provides that an “emerging growth company” can take advantage of an extended transition period for complying with new or revised accounting standards. We have not chosen to take advantage of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to deferred commissions, stock-based compensation and business combination and valuation of goodwill and acquired intangible assets. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.

The tracking of certain of our user metrics is done with internal tools and is not independently verified. Certain of our user metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.

We track certain user metrics with internal tools, which are not independently verified by any third party. Our internal tools have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our user metrics, including the metrics we report. If the internal tools we use to track these metrics undercount or overcount performance or contain algorithm or other technical errors, the data we report may not be accurate. For example, we track the number of individual users and organizational domains but cannot determine the number of unique users or unique organizations in which we have paying customers with certainty, and our inability to determine the number of our unique users and unique organizations in which we have paying customers may adversely affect our understanding of certain aspects of our business and make it more challenging to manage our business. In addition, limitations or errors with respect to how we measure data (or the data that we measure) may affect our understanding of certain details of our business, which could affect our longer-term strategies. Additionally, regulatory changes could affect requirements related to data we track related to our metrics, and those changes could impact how we continue to measure and compare data over time. If our performance metrics are not accurate representations of our business, if we discover material inaccuracies in our metrics or if the metrics we rely on to track our

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performance do not provide an accurate measurement of our business, our reputation may be harmed and our business, results of operations and financial condition could be adversely affected, causing our stock price to decline.

Certain of our market opportunity estimates, growth forecasts and key business metrics included in this prospectus could prove to be inaccurate, and any real or perceived inaccuracies may harm our reputation and negatively affect our business.

Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The estimates and forecasts in this prospectus relating to the size and expected growth of our target market may prove to be inaccurate. Even if the markets in which we compete meet the size estimates and growth forecasted in this prospectus, our business could fail to grow at similar rates, if at all. We also rely on assumptions and estimates to calculate certain of our key business metrics, such as paying users. We regularly review and may adjust our processes for calculating our key business metrics to improve their accuracy. Our key business metrics may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology. If investors or analysts do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results of operations and financial condition would be harmed.

We previously identified a material weakness in our internal control over financial reporting. Although we believe that this material weakness has since been addressed, we may identify material weaknesses in the future which may cause us to be unable to accurately or timely report our financial condition or results of operations.

In connection with the audits of our 2016 and 2017 consolidated financial statements, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, that creates a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Under our build-to-suit lease arrangements for our current corporate headquarters, we incurred tenant improvement costs which were reimbursed by the landlord. We had recorded the reimbursements as cash flows from investing activities; however, these reimbursements should have been recorded as cash flows from financing activities. The error resulted from a material weakness in our internal control over financial reporting. We have addressed this material weakness by enhancing the expertise of our finance and accounting staff and updating our accounting policy. We have properly recorded these reimbursements in our 2016 and 2017 audited consolidated financial statements as cash flows from financing activities. We believe that the material weakness has been remediated; however, we will continue to perform an ongoing evaluation of the enhancements to our design and operating effectiveness of our internal control over financial reporting through the end of our annual reporting cycle.

If we identify future material weaknesses in our internal control over financial reporting or fail to meet the demands that will be placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results or report them within the timeframes required by law or stock exchange regulations. Failure to comply with Section 404 of the Sarbanes-Oxley Act could also potentially subject us to sanctions or investigations by the SEC or other regulatory authorities. If additional material weaknesses exist or are discovered in the future, and we are unable to remediate any such material weakness, our reputation, business, results of operations and financial condition may be adversely affected.

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If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the applicable listing standards of the NASDAQ Stock Market. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting, which includes hiring additional accounting and financial personnel to implement such processes and controls. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. If any of these new or improved controls and systems do not perform as expected, we may experience material weaknesses in our controls.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NASDAQ Stock Market. We are not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K.

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on our business and results of operations and could cause a decline in the price of our common stock.

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Our reported results of operations may be adversely affected by changes in accounting principles generally accepted in the United States.

Generally accepted accounting principles in the United States, or GAAP, are subject to interpretation by the Financial Accounting Standards Board, or the FASB, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported results of operations and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. For example, in May 2014, the FASB issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, or ASC 606, which superseded nearly all existing revenue recognition guidance. We adopted the requirements of ASC 606 as of January 1, 2018, utilizing the full retrospective method of transition. As such, ASC 606 is reflected in our financial results for all periods presented in this prospectus. The adoption of ASC 606 primarily resulted in changes to our accounting policies for revenue recognition and deferred commissions, which we believe to be critical accounting policies. We previously expensed commissions that are now deferred, but overall the impact of adopting ASC 606 was not material to revenue. We are currently evaluating the impact of adoption of ASC 2016-02, Leases (Topic 842). It is difficult to predict the impact of future changes to accounting principles or our accounting policies, any of which could negatively affect our results of operations.

Indemnity provisions in various agreements potentially expose us to liability for intellectual property infringement, data protection and other losses.

Our agreements with customers and other third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, data protection, damages caused by us to property or persons or other liabilities relating to or arising from our products or other contractual obligations. Some of these indemnity agreements provide for uncapped liability for which we would be responsible, and some indemnity provisions survive termination or expiration of the applicable agreement. Large indemnity payments could harm our business, results of operations and financial condition. Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability related to them and we may be required to cease use of certain functions of our products as a result of any such claims. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other existing customers and new customers and harm our business, results of operations and financial condition.

Risks Related to Our Common Stock

There has been no prior public trading market for our common stock, and an active trading market may not develop or be sustained following this offering.

We have applied to list our common stock on the NASDAQ Global Select Market under the symbol “SVMK”. However, prior to this offering, there has been no prior public trading market for our common stock. We cannot assure you that an active trading market for our common stock will develop on such exchange or elsewhere or, if developed, that any market will be sustained. The initial public offering price of our common stock will be determined through negotiation between us and the underwriters. This price will not necessarily reflect the price at which investors in the market will be willing to buy and sell shares of our common stock following this offering.

In addition, the market price of our common stock following this offering is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. Accordingly, we cannot assure you of the liquidity of any trading market, your ability to sell your shares of our common stock when desired or the prices that you may obtain for your shares of our common stock.

The trading price of our common stock could be volatile, and you could lose all or part of your investment.

Technology stocks have historically experienced high levels of volatility. The trading price of our common stock following this offering may fluctuate substantially and be higher or lower than the initial public offering

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price, depending on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include the following:

• price and volume fluctuations in the overall stock market from time to time;

• announcements of new products, solutions or technologies, commercial relationships, acquisitions or other events by us or our competitors;

• changes in how customers perceive the benefits of our products and future offerings;

• departures of key personnel;

• the public’s reaction to our press releases, other public announcements and filings with the SEC;

• fluctuations in the trading volume of our shares or the size of our public float;

• sales of large blocks of our common stock;

• actual or anticipated changes or fluctuations in our results of operations;

• whether our results of operations meet the expectations of securities analysts or investors;

• changes in actual or future expectations of investors or securities analysts;

• actual or perceived significant data breach involving our products or website;

• litigation involving us, our industry or both;

• governmental or regulatory actions or audits;

• regulatory developments in the United States, foreign countries or both;

• general economic conditions and trends;

• major catastrophic events in our domestic and foreign markets; and

• “flash crashes,” “freeze flashes” or other glitches that disrupt trading on the securities exchange on which we are listed.

In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the trading price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have an adverse effect on our business, results of operations and financial condition.

Upon completion of this offering, our executive officers, directors and holders of 5% or more of our common stock will collectively beneficially own approximately     % of the outstanding shares of our common stock and continue to have substantial control over us, which will limit your ability to influence the outcome of important transactions, including a change in control.

Upon completion of this offering, our executive officers, directors and each of our stockholders who own 5% or more of our outstanding common stock and their affiliates, in the aggregate, will beneficially own approximately     % of the outstanding shares of our common stock, based on the number of shares outstanding as of June 30, 2018. As a result, these stockholders, if acting together, will be able to influence or control

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matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

We anticipate spending substantial funds in connection with the tax liabilities that arise upon the initial settlement of RSUs in connection with this offering and following this offering. The manner in which we fund these expenditures may have an adverse effect on our financial condition.

We anticipate that we will spend substantial funds to satisfy certain income tax withholding and remittance obligations when we settle our RSUs granted prior to the date of this prospectus, as well as those granted after the date of this prospectus. As of June 30, 2018, 3,594,405 of the RSUs that we have issued to date vest upon the satisfaction of both a service condition and the Performance Vesting Condition. The service condition for the majority of our outstanding RSUs is satisfied over a period of four years. Generally, the Performance Vesting Condition is satisfied upon the earlier of (i) a public company offering pursuant to a registration statement under the Securities Act on an active trading market and (ii) an acquisition or change in control of us. When the RSUs vest, we will deliver one share of common stock for each vested RSU on the settlement date. The RSUs vest on the first date upon which both the service-based vesting condition and the Performance Vesting Condition are satisfied, and upon vesting we anticipate withholding shares and remitting income taxes on behalf of the holders at the applicable minimum statutory rates, which we refer to as net settlement. Based on number of RSUs outstanding as of June 30, 2018 for which the service condition has been satisfied on that date, and assuming the Performance Vesting Condition had been satisfied on that date and the assumed initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, we estimate that these income tax withholding and remittance obligations would be approximately $         in the aggregate. The amount of these obligations could be higher or lower, depending on the price of shares of our common stock and the actual number of RSUs outstanding for which the service condition has been satisfied on the initial settlement date for such RSUs. To settle these RSUs on the initial settlement date, we would expect to deliver an aggregate of approximately 2,156,643 shares of our common stock to the RSU holders after withholding an aggregate of approximately 1,437,762 shares of our common stock. In order to fund certain tax withholding and remittance obligations on behalf of our RSU holders, we expect to use a portion of the proceeds from this offering.

Shares of our common stock are subordinate to our debts and other liabilities, resulting in a greater risk of loss for stockholders.

Shares of our common stock are subordinate in right of payment to all of our current and future debt. We cannot assure that there would be any remaining funds after the payment of all of our debts for any distribution to holders of the common stock.

Our debt service requirements and restrictive covenants limit our ability to borrow more money, to make distributions to our stockholders and to engage in other activities.

Our existing credit agreement, as amended, contains a number of covenants that limit our ability and our subsidiaries’ ability to, among other things, transfer or dispose of assets, pay dividends or make distributions, incur additional indebtedness, create liens, make investments, loans and acquisitions, engage in transactions with affiliates, merge or consolidate with other companies or sell substantially all of our assets. Our credit agreement is guaranteed by us and certain of our subsidiaries and secured by substantially all of the assets of the borrower subsidiary, us and the guarantor subsidiaries. The terms of our credit agreement may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital

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needs or to execute preferred business strategies. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy and compete against companies who are not subject to such restrictions. Additionally, our obligations to repay principal and interest on our indebtedness make us vulnerable to economic or market downturns.

If we are unable to comply with our payment requirements, our lenders may accelerate our obligations under our credit agreement and foreclose upon the collateral, or we may be forced to sell assets, restructure our indebtedness or seek additional equity capital, which would dilute our stockholders’ interests. If we fail to comply with any covenant it could result in an event of default under the agreement and the lenders (or any subsequent lender) could make the entire debt immediately due and payable. If this occurs, we might not be able to repay our debt or borrow sufficient funds to refinance it. Even if new financing is available, it may not be on terms that are acceptable to us. These events could cause us to cease operations.

Our failure to comply with our credit agreement and other indebtedness could require us to abandon our business.

Our indebtedness increases the risk that we will not be able to operate profitably because we will need to make principal and interest payments on our debt. Debt financing also exposes our stockholders to the risk that their holdings could be lost in the event of a default on the indebtedness and a foreclosure and sale of our assets for an amount that is less than the outstanding debt. Our ability to obtain additional debt financing, if required, will be subject to approval of our lenders, which may not be granted, or the interest rates and the credit environment as well as general economic factors and other factors over which we have no control may not be favorable. This may hinder our ability to service our existing debt or obtain additional debt financing.

If securities or industry analysts publish reports that are interpreted negatively by the investment community or publish negative research reports about our business, our share price and trading volume could decline.

The trading market for our common stock depends, to some extent, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts or the information contained in their reports. If one or more analysts publish research reports that are interpreted negatively by the investment community, or have a negative tone regarding our business, financial or operating performance, industry or end-markets, our share price could decline. In addition, if a majority of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.

We anticipate that the net proceeds from this offering will be used to partially repay $         of the outstanding indebtedness under our credit facilities, pay certain income tax withholding obligations associated with the initial settlement of RSUs that will settle upon the completion of this offering, and for working capital and other general corporate purposes, including continued investments in our products, growing our customer base, building our outbound sales team and expanding our international footprint. We may also use a portion of the net proceeds of this offering for acquisitions, strategic investments in businesses or technologies or retirement of debt. However, we do not have any agreements or commitments for any material acquisitions or strategic investments at this time. Accordingly, our management will have broad discretion over the specific use of the net proceeds that we receive in this offering and might not be able to obtain a significant return, if any, on investment of these net proceeds. Investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds. The net proceeds may be invested with a view towards long-term benefits for our stockholders and this may not increase our results of operations or market value. If we do not use the net proceeds that we receive in this offering effectively, our business, results of operations and financial condition could be harmed.

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Purchasers in this offering will immediately experience substantial dilution in net tangible book value.

The initial public offering price of our common stock is substantially higher than the pro forma net tangible book value per share of our common stock immediately following this offering based on the total value of our tangible assets less our total liabilities. Therefore, if you purchase shares of our common stock in this offering, you will experience immediate dilution of $         per share, the difference between the price per share you pay for our common stock and the pro forma net tangible book value per share as of June 30, 2018, after giving effect to the issuance of shares of our common stock in this offering. See the section titled “Dilution” below.

Sales of substantial amounts of our common stock in the public markets, or the perception that such sales could occur, could reduce the price that our common stock might otherwise attain.

Sales of a substantial number of shares of our common stock in the public market after this offering, or the perception that such sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate. Based on the total number of outstanding shares of our capital stock as of June 30, 2018, upon completion of this offering, we will have approximately                 shares of capital stock outstanding, assuming no exercise by the underwriters of their option to purchase additional shares. All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act, except for any shares held by our “affiliates” as defined in Rule 144 under the Securities Act.

Our executive officers, directors and holders of a substantial majority of our common stock and securities convertible into or exchangeable for shares of our common stock have entered into or will enter into lock-up agreements with the underwriters of this offering under which we and they have agreed or will agree that, subject to certain exceptions, without the prior written consent of J.P. Morgan Securities LLC, we and they will not dispose of or hedge any shares or any securities convertible into or exchangeable for shares of our common stock for a period of 180 days after the date of this prospectus. Pursuant to the lock-up agreements with the underwriters, if (i) at least 120 days have elapsed since the date of this prospectus, (ii) we have publicly released our earnings results for the quarterly period during which this offering occurred, and (iii) such lock-up period is scheduled to end during or within five trading days prior to a broadly applicable period during which trading in our securities would not be permitted under our insider trading policy, or a blackout period, such lock-up period will end ten trading days prior to the commencement of such blackout period. In addition, our executive officers, directors and holders of substantially all of our common stock and securities convertible into or exchangeable for shares of our common stock have entered into market standoff agreements with us, or are subject to covenants requiring them to enter into such an agreement, under which they have agreed that, subject to certain exceptions, without our consent, they will not dispose of or hedge any shares or any securities convertible into or exchangeable for shares of our common stock for a period of 180 days after the date of this prospectus. When the lock-up period in the lock-up agreements and market standoff agreements expires, we and our locked-up security holders will be able to sell our shares in the public market. In addition, J.P. Morgan Securities LLC, on behalf of the underwriters, may release all or some portion of the shares subject to the lock-up agreements or market standoff agreements prior to the expiration of the lock-up period. See the section titled “Shares Eligible for Future Sale” for more information. Sales of a substantial number of such shares, or the perception that such sales may occur, upon expiration of, or early release of the securities subject to, the lock-up agreements or market standoff agreements, could cause our stock price to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.

Based on shares outstanding as of June 30, 2018, holders of up to approximately              shares, or     % of our capital stock after the completion of this offering, will have rights, subject to certain conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the offer and sale of all shares of capital stock that we may issue under our equity compensation plans.

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We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.

As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the NASDAQ Stock Market and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of rendering more difficult, delaying or preventing a change of control or changes in our management. Among other things, our amended and restated certificate of incorporation and amended and restated bylaws include provisions that:

• authorize our board of directors to issue, without further action by the stockholders, up to shares of undesignated preferred stock;

• require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

• specify that special meetings of our stockholders can be called only by our board of directors, the Chair of our board of directors or our Chief Executive Officer;

• establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

• establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving three-year staggered terms;

• prohibit cumulative voting in the election of directors;

• provide that our directors may be removed only for cause;

• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and

• require the approval of our board of directors or the holders of at least 66 ²⁄₃% of our outstanding shares of capital stock to amend our amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. Provisions in our credit facilities also deter or prevent a business combination. In addition, institutional shareholder representative groups, shareholder activists and others may disagree with our corporate governance provisions or other practices, including anti-takeover provisions, such as those listed above. We generally will consider recommendations of

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institutional shareholder representative groups, but we will make decisions based on what our board and management believe to be in the best long-term interests of our company and stockholders; however, these groups could make recommendations to our stockholders against our practices or our board members if they disagree with our positions. Finally, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated bylaws provides that the Court of Chancery of the State of Delaware is the exclusive forum for:

• any derivative action or proceeding brought on our behalf;

• any action asserting a breach of fiduciary duty;

• any action asserting a claim against us arising under the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws; and

• any action asserting a claim against us that is governed by the internal-affairs doctrine.

Our amended and restated bylaws further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.

Affiliates of several of the underwriters in this offering may receive at least 5% of the net proceeds of this offering and may have an interest in this offering beyond customary underwriting discounts and commissions.

J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated are underwriters in this offering and their respective affiliates will receive at least 5% of the net proceeds of this offering in connection with the repayment of $             million that is expected to be outstanding under our revolving credit facilities immediately prior to the completion of this offering. As such, J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated are each deemed to have a “conflict of interest” under Rule 5121 of the Financial Industry Regulatory Authority Inc., or Rule 5121. Accordingly, this offering will be made in compliance with the applicable provisions of Rule 5121. This rule requires, among other things, that a “qualified independent underwriter” has participated in the preparation of, and has exercised the usual standards of “due diligence” with respect to, the registration statement. Allen & Company LLC has agreed to act as qualified independent underwriter for this offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act. Allen & Company LLC will not receive any additional fees for serving as qualified independent underwriter in connection with this offering. Although Allen & Company LLC has, in its capacity as qualified independent underwriter, participated in due diligence and the preparation of this prospectus and the registration statement of which this prospectus forms a part, we cannot assure you that this will adequately address all potential conflicts of interest. We will agree to indemnify Allen & Company LLC against liabilities incurred in connection with acting as qualified independent underwriter, including liabilities under the Securities Act. Pursuant to FINRA Rule 5121, J.P. Morgan Securities LLC and Merrill Lynch, Pierce,

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Fenner & Smith Incorporated will not confirm sales of securities to any account over which it exercises discretionary authority without the prior written approval of the accountholder. See the section titled “Underwriting (Conflict of Interest)” for additional information.

We do not expect to declare any dividends in the foreseeable future.

We have never declared nor paid any cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors. As a result, stockholders must rely on sales of their common stock after price appreciation as the only way to realize any future gains on their investment, if any. Our ability to pay dividends is also subject to restrictions in our credit facilities as well as the restrictions on the ability of our subsidiaries to pay dividends or make distributions to us.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

• our ability to attract new users or convert registered users to paying users;

• our ability to retain paying users;

• our ability to convert organizations to SurveyMonkey Enterprise customers;

• our ability to maintain and improve our products;

• our ability to upsell and cross-sell within our existing customer and user base;

• our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, paying users and free cash flow;

• possible harm caused by significant disruption of service or loss or unauthorized access to users’ data;

• our ability to prevent serious errors or defects in our products;

• our ability to respond to rapid technological changes;

• our ability to compete successfully in competitive markets;

• our ability to protect our brand;

• the demand for our survey platform or for survey software solutions in general;

• our expectations and management of future growth;

• our ability to accelerate growth with the introduction of a significant outbound salesforce;

• our ability to attract large organizations as users;

• our ability to attract and retain key personnel and highly qualified personnel;

• our ability to manage our international expansion;

• our ability to maintain, protect and enhance our intellectual property;

• our ability to effectively integrate our products and solutions with others;

• our ability to achieve or maintain profitability;

• our ability to manage our outstanding indebtedness;

• our ability to successfully identify, acquire and integrate companies and assets;

• our ability to offer high-quality customer support;

• the increased expenses associated with being a public company; and

• our anticipated uses of net proceeds from this offering.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

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You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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INDUSTRY AND MARKET DATA

This prospectus contains estimates and information concerning our industry, including market size of the markets in which we participate, that are based on industry publications and reports. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The markets in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in these publications and reports.

The source of certain statistical data, estimates and forecasts contained in this prospectus are the following independent industry publications or reports:

• ESOMAR, Global Market Research 2017: An ESOMAR Industry Report in cooperation with BDO Accountants & Advisors, 2017.

• Gallup, State of American Workplace, February 2017.

• Gartner, Inc., Gartner Market Databook, 2Q18 Update: Spending on IT by Technology Segment and Country, 2016-2022, 20 July 2018.

• Harvard Business School, Working Knowledge, Clay Christensen’s Milkshake Marketing, February 2011.

• International Data Corporation White Paper, sponsored by Seagate Technology LLC, Data Age 2025: The Evolution of Data to Life-Critical, April 2017.

• MarketsandMarkets, Customer Experience Management Market by Touch Point, Vertical, and Region – Global Forecast to 2022, November 2017.

• Ovum, Get It Right: Deliver the Omni-Channel Support Customers Want, August 2016.

• Technavio, Global Talent Management Software Market 2018-2022, June 2018.

The Gartner Report(s) described herein (the “Gartner Report(s)”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this prospectus) and the opinions expressed in the Gartner Report(s) are subject to change without notice.

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USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $            , based upon the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares of our common stock from us is exercised in full, we estimate that the net proceeds to us would be approximately $            , after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase or decrease in the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease the net proceeds that we receive from this offering by approximately $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares of our common stock offered by us would increase or decrease the net proceeds that we receive from this offering by approximately $            , assuming the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions payable by us.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and enable access to the public equity markets for us and our stockholders.

We intend to use the proceeds from this offering, net of underwriting discounts and commissions and expenses payable by us, to (i) partially repay $             of the outstanding indebtedness under our credit facilities, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and (ii) pay certain income tax withholding obligations of $             (for which we will withhold shares) related to the RSU Settlement, based upon the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates.” We intend to use the remainder of the net proceeds from this offering for working capital and other general corporate purposes, as well as the acquisition of, or investment in, complementary products, technologies, solutions or businesses, although we have no present commitments or agreements to enter into any material acquisitions or investments.

We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering. Accordingly, we will have broad discretion in using these proceeds. Pending the use of proceeds from this offering as described above, we may invest the net proceeds that we receive in this offering in short-term, investment grade, interest-bearing instruments, including government and investment-grade debt securities and money-market funds.

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DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Additionally, our ability to pay dividends on our common stock is limited by restrictions on our ability to pay dividends or make distributions under the terms of our credit facilities. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.

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CAPITALIZATION

The following table sets forth cash and cash equivalents, as well as our capitalization, as of June 30, 2018 as follows:

• on an actual basis; and

• on a pro forma basis, giving effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation in Delaware that will become effective immediately prior to the completion of this offering, (ii) the sale and issuance by us of                 shares of our common stock in this offering, based upon the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, (iii) stock-based compensation expense of approximately $80.9 million related to the RSU Settlement, (iv) the payment of $             to satisfy certain income tax withholding and remittance obligations related to the RSU Settlement based upon the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and (v) the partial repayment of $             of the outstanding indebtedness under our credit facilities.

The pro forma information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with our consolidated financial statements and related notes, and the sections titled “Selected Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

	As of June 30, 2018
(in thousands, except share and par value)	Actual			Pro Forma
Cash and cash equivalents	$	43,391		$
Total debt, net		317,304
Mandatorily redeemable convertible preferred stock ($0.01 par value, 20,000,000 shares authorized, no shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma)		—
Stockholders’ equity:
Preferred stock ($0.01 par value, no shares authorized, issued and outstanding, actual; $0.00001 par value, 100,000,000 shares authorized, no shares issued and outstanding, pro forma)
Common stock ($0.01 par value, 137,000,000 shares authorized, 101,734,625 shares issued and outstanding, actual; $0.00001 par value, 800,000,000 shares authorized,              shares issued and outstanding, pro forma)		1,017
Additional paid-in capital		231,586
Accumulated other comprehensive loss		(243	)
Accumulated deficit		(204,751	)
Total stockholders’ equity		27,609
Total capitalization	$	344,913		$

Each $1.00 increase or decrease in the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, (i) our pro forma cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting

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the estimated underwriting discounts and commissions and (ii) the amount we would be required to pay to satisfy certain income tax withholding and remittance obligations related to the RSU Settlement by $            . Any increase or decrease of 1.0 million shares in the number of shares offered by us would increase or decrease, as applicable, the amount of our pro forma cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $            , assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions.

If the underwriters’ option to purchase additional shares of our common stock from us is exercised in full, pro forma cash and cash equivalents, additional paid-in capital, total stockholders’ equity, total capitalization and shares outstanding as of June 30, 2018 would be $         million, $         million, $         million, $         million and                 , respectively.

The number of shares of our common stock that will be outstanding after this offering is based on 103,891,268 shares of our common stock outstanding as of June 30, 2018 (which includes 2,156,643 shares of common stock representing the net number of shares that we will deliver to certain holders of RSUs upon the effectiveness of this offering in connection with the RSU Settlement), and excludes:

• 17,011,811 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock that were outstanding as of June 30, 2018, with a weighted average exercise price of $14.46 per share;

• 6,839,513 shares of our common stock issuable upon the vesting of RSUs that were outstanding as of June 30, 2018 where the service-based vesting condition and Performance Vesting Condition are not met;

• 661,771 shares of our common stock issuable upon the vesting of RSUs granted after June 30, 2018;

• 1,390,753 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock that were granted after June 30, 2018, with an exercise price of $13.65 per share; and

• 16,560,053 shares of our common stock reserved for future issuance under our equity compensation plans, consisting of:

• 9,394,744 shares of our common stock to be reserved for future issuance under our 2018 Plan, which will become effective prior to the completion of this offering;

• 4,491,865 shares of our common stock reserved for future issuance under our 2011 Plan, which number of shares will be added to the shares of our common stock to be reserved for future issuance under our 2018 Plan upon its effectiveness; and

• 2,673,444 shares of our common stock to be reserved for future issuance under our ESPP, which will become effective prior to the completion of this offering.

On the date of this prospectus, any remaining shares available for issuance under our 2011 Plan will be added to the shares reserved under our 2018 Plan and we will cease granting awards under the 2011 Plan. Our 2018 Plan and ESPP also provide for annual automatic increases in the number of shares reserved thereunder and for increases based on forfeited or withheld shares and other events, as more fully described in “Executive Compensation—Employee Benefits and Stock Plans.”

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DILUTION

If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock immediately after this offering. Net tangible book value dilution per share to new investors represents the difference between the amount per share paid by purchasers of shares of our common stock in this offering and the pro forma net tangible book value per share of common stock immediately after completion of this offering.

Net tangible book value per share is determined by dividing our total tangible assets less our total liabilities by the number of shares of our common stock outstanding. Our historical net tangible book value (deficit) as of June 30, 2018 was $(363.1) million, or $(3.57) per share.

After giving effect to (i) the sale by us of                 shares of our common stock in this offering at the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, (ii) the payment of $             to satisfy certain tax withholding obligations associated with the RSU settlement as if the offering was completed as of June 30, 2018, based upon the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and (iii) the partial repayment of $             of the outstanding indebtedness under our credit facilities, our pro forma net tangible book value as of June 30, 2018 would have been $         million, or $             per share. This represents an immediate increase in historical net tangible book value of $             per share to our existing stockholders and an immediate dilution in historical net tangible book value of $             per share to investors purchasing shares of our common stock in this offering at the assumed initial public offering price. The following table illustrates this dilution:

Assumed initial public offering price per share				$
Historical net tangible book value (deficit) per share as of June 30, 2018	$	(3.57	)
Increase in pro forma net tangible book value (deficit) per share attributable to new investors purchasing shares of our common stock in this offering
Pro forma net tangible book value per share immediately after this offering
Dilution in pro forma net tangible book value per share to new investors in this offering				$

Each $1.00 increase or decrease in the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our pro forma net tangible book value per share to new investors by $            , and would increase or decrease, as applicable, dilution per share to new investors purchasing shares of our common stock in this offering by $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our common stock offered by us would increase or decrease, as applicable, our pro forma net tangible book value by approximately $             per share and increase or decrease, as applicable, the dilution to new investors purchasing shares of our common stock in this offering by $             per share, assuming the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters’ option to purchase additional shares of our common stock from us is exercised in full, the pro forma net tangible book value per share of our common stock, as adjusted to give effect to this offering, would be $             per share, and the dilution in pro forma net tangible book value per share to new investors purchasing shares of our common stock in this offering would be $             per share.

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The following table presents, as of June 30, 2018, the differences between the existing stockholders and the new investors purchasing shares of our common stock in this offering with respect to the number of shares purchased from us, the total consideration paid or to be paid to us, which includes net proceeds received from the issuance of our common stock, cash received from the exercise of stock options and the average price per share paid or to be paid to us at the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

	Shares Purchased			Total Consideration			Average Price per Share
	Number	Percent		Amount	Percent
Existing stockholders			%	$		%	$
New investors
Totals			100%	$		100%

Each $1.00 increase or decrease in the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors and total consideration paid by all stockholders by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares of our common stock offered by us would increase or decrease the total consideration paid by new investors and total consideration paid by all stockholders by approximately $            , assuming the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions payable by us.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’ option to purchase additional shares of our common stock from us. If the underwriters’ option to purchase additional shares of our common stock were exercised in full, our existing stockholders would own     % and our new investors would own     % of the total number of shares of our common stock outstanding upon completion of this offering.

The number of shares of our common stock that will be outstanding after this offering is based on 103,891,268 shares of our common stock outstanding, as of June 30, 2018 (which includes 2,156,643 shares of common stock representing the net number of shares that we will deliver to certain holders of RSUs upon the effectiveness of this offering in connection with the RSU Settlement), and excludes:

• 17,011,811 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock that were outstanding as of June 30, 2018, with a weighted average exercise price of $14.46 per share;

• 6,839,513 shares of our common stock issuable upon the vesting of RSUs that were outstanding as of June 30, 2018 where the service-based vesting condition and Performance Vesting Condition are not met;

• 661,771 shares of our common stock issuable upon the vesting of RSUs granted after June 30, 2018;

• 1,390,753 shares of our common stock issuable upon exercise of options to purchase shares of our common stock that were granted after June 30, 2018, with an exercise price of $13.65 per share; and

• 16,560,053 shares of our common stock reserved for future issuance under our equity compensation plans, consisting of:

• 9,394,744 shares of our common stock to be reserved for future issuance under our 2018 Plan, which will become effective prior to the completion of this offering;

• 4,491,865 shares of our common stock reserved for future issuance under our 2011 Plan, which number of shares will be added to the shares of our common stock to be reserved for future issuance under our 2018 Plan upon its effectiveness; and

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• 2,673,444 shares of our common stock to be reserved for future issuance under our ESPP, which will become effective prior to the completion of this offering,

On the date of this prospectus, any remaining shares available for issuance under our 2011 Plan will be added to the shares reserved under our 2018 Plan and we will cease granting awards under the 2011 Plan. Our 2018 Plan also provide for automatic annual increases in the number of shares reserved thereunder and for increases based on forfeited or withheld shares and other events, as more fully described in “Executive Compensation—Employee Benefits and Stock Plans.”

To the extent that any outstanding options to purchase our common stock are exercised, RSUs are settled or new awards are granted under our equity compensation plans, there will be further dilution to investors participating in this offering.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto included elsewhere in this prospectus. The consolidated statements of operations data for each of the years ended December 31, 2016 and 2017 and the consolidated balance sheet data as of December 31, 2016 and 2017 are derived from our audited consolidated financial statements that are included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended June 30, 2017 and 2018, and the consolidated balance sheet data as of June 30, 2018, have been derived from our unaudited condensed consolidated financial statements appearing elsewhere in this prospectus. We have prepared the unaudited selected consolidated financial data set forth below on a basis consistent with our audited annual consolidated financial statements, included elsewhere in this prospectus, and include, in our opinion, all normal recurring adjustments necessary for the fair presentation of the results of operations for the periods presented. Our historical quarterly results are not necessarily indicative of our results of operations to be expected for the remainder of 2018 or any future period. The selected consolidated financial data in this section are not intended to replace the consolidated financial statements and related notes thereto included elsewhere in this prospectus and are qualified in their entirety by the consolidated financial statements and related notes thereto included elsewhere in this prospectus.

Consolidated Statements of Operations Data

	Year Ended December 31,						Six Months Ended June 30,
(in thousands, except per share amounts)	2016			2017			2017			2018
Revenue	$	207,295		$	218,773		$	106,452		$	121,187
Cost of revenue(1)(2)		67,755			62,679			30,842			35,754
Gross profit		139,540			156,094			75,610			85,433
Operating expenses:
Research and development(1)		37,985			53,660			24,980			34,232
Sales and marketing(1)(2)		73,970			73,511			36,913			37,300
General and administrative(1)		36,832			47,940			24,129			26,418
Restructuring(1)		25,256			1,785			145			33
Total operating expenses		174,043			176,896			86,167			97,983
Loss from operations		(34,503	)		(20,802	)		(10,557	)		(12,550	)
Interest expense		32,893			26,865			13,316			14,685
Other non-operating income (expense), net		(4,250	)		7,610			7,176			351
Loss before income taxes		(71,646	)		(40,057	)		(16,697	)		(26,884	)
Provision for (benefit from) income taxes		4,704			(16,047	)		2,400			296
Net loss	$	(76,350	)	$	(24,010	)	$	(19,097	)	$	(27,180	)
Net loss per share, basic and diluted	$	(0.77	)	$	(0.24	)	$	(0.19	)	$	(0.27	)
Weighted-average shares used in computing basic and diluted net loss per share		98,539			100,244			99,787			101,419
Pro forma net loss per share, basic and diluted(3)				$	(0.24	)				$	(0.26	)
Weighted-average shares used in computing pro forma basic and diluted net loss per share (unaudited)(3)					101,126						103,264

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⁽¹⁾  Includes stock-based compensation, net of amounts capitalized as follows:

	Year Ended December 31,				Six Months Ended June 30,
(in thousands)	2016		2017		2017		2018
Cost of revenue	$	4,114	$	2,503	$	1,236	$	1,304
Research and development		5,756		9,918		4,266		6,413
Sales and marketing		8,712		8,069		5,300		1,915
General and administrative		12,301		14,496		7,139		7,660
Restructuring		2,074		—		—		—
Stock-based compensation, net of amounts capitalized	$	32,957	$	34,986	$	17,941	$	17,292

⁽²⁾  Includes amortization of acquired intangible assets as follows:

	Year Ended December 31,				Six Months Ended June 30,
(in thousands)	2016		2017		2017		2018
Cost of revenue	$	4,505	$	2,040	$	1,064	$	976
Sales and marketing		4,267		2,421		1,213		1,208
Amortization of acquired intangible assets	$	8,772	$	4,461	$	2,277	$	2,184

⁽³⁾  See Note 12 of the Notes to Consolidated Financial Statements included elsewhere in this prospectus for an explanation of the method used to calculate basic and diluted net loss per common share and pro forma net loss per common share.

Consolidated Balance Sheet Data

	As of
(in thousands)	December 31, 2016		December 31, 2017		June 30, 2018
Cash and cash equivalents	$	23,287	$	35,345	$	43,391
Working capital(1)		566		16,560		26,273
Total deferred revenue(2)		76,420		85,048		99,559
Financing obligation on leased facility		81,939		93,385		92,682
Total debt, net		319,300		318,321		317,304
Total stockholders’ equity		33,021		40,043		27,609

⁽¹⁾  Working capital is calculated as current assets less current liabilities, excluding deferred revenue.

⁽²⁾  Includes short-term deferred revenue of $76.4 million, $84.8 million and $99.3 million as of December 31, 2016 and 2017 and June 30, 2018, respectively, and includes long-term deferred revenue (included in other non-current liabilities) of $0.2 million and $0.3 million as of December 31, 2017 and June 30, 2018, respectively.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2016			2017			2017			2018
Net cash provided by operating activities	$	35,842		$	45,026		$	14,765		$	22,031
Net cash used in investing activities		(46,903	)		(32,354	)		(13,461	)		(9,277	)
Net cash provided by (used in) financing activities		614			(614	)		2,088			(4,540	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(10,447	)	$	12,058		$	3,392		$	8,214

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Key Business Metric

To analyze our business performance, determine financial forecasts and help develop long-term strategic plans, we review the following key business metric:

	As of December 31,				As of June 30,
(in thousands)	2016		2017		2017		2018
Paying users		575		606		598		616

Paying users

We define a paying user as an individual customer of our survey platform or form-based application, a seat within a SurveyMonkey Enterprise deployment or a subscription to one of our purpose-built solutions, in each case as of the end of a period. One person would count as multiple paying users if the person had more than one paid license at the end of the period. For example, if an individual paying user also had a designated seat in a SurveyMonkey Enterprise deployment, we would count that person as two paying users.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metric” for additional information.

Non-GAAP Financial Measures

We believe that, in addition to our results determined in accordance with GAAP, core revenue, average revenue per paying user, free cash flow and adjusted EBITDA, all of which are non-GAAP financial measures, are useful in evaluating our business, results of operations and financial condition.

	Year Ended December 31,					Six Months Ended June 30,
(in thousands, except ARPU)	2016			2017		2017			2018
Core revenue	$	192,056		$	213,984	$	102,062		$	121,187
Average revenue per paying user (ARPU)		349			362		351			400
Free cash flow		(4,895	)		5,579		(6,718	)		11,755
Adjusted EBITDA		64,721			61,882		31,060			28,427

Core revenue

We define core revenue as revenue from our survey platform, form-based application and purpose-built solutions, excluding the non-self-serve portion of our SurveyMonkey Audience solution, which we generally ceased offering at the end of the second quarter of 2017.

Average revenue per paying user

We define ARPU as core revenue divided by the average number of paying users during the period. For interim periods, we use annualized core revenue which is calculated by dividing the core revenue for the period by the number of days in that period and multiplying this value by 365 days. We calculate the average number of paying users by adding the number of paying users as of the end of the prior period to the number of paying users as of the end of the current period, and then dividing by two.

Free cash flow

We define free cash flow as GAAP net cash provided by operating activities less purchases of property and equipment, net of tenant improvement reimbursements, and capitalized internal-use software. For 2016 and

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2017, and for the six months ended June 30, 2017 and 2018, our free cash flow included cash payments for interest on our long-term debt of $19.8 million, $19.9 million, $10.0 million and $10.8 million, respectively, a one-time deferred payment of $7.7 million in the first quarter of 2017 related to our acquisition of TechValidate and $4.3 million in third-party fees related to the refinancing of our credit facilities in the second quarter of 2017.

Adjusted EBITDA

We define adjusted EBITDA as net loss excluding interest expense, provision for (benefit from) income taxes, depreciation and amortization, other non-operating expenses (income), net, stock-based compensation and restructuring, financing and acquisition-related costs.

Core revenue, ARPU, free cash flow and adjusted EBITDA are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for explanations of how we calculated these measures and for reconciliations to the most directly comparable GAAP financial measures.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the section titled “Selected Consolidated Financial and Other Data” and the consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Additionally, our unaudited results for the six months ended June 30, 2018 may not be indicative of the results to be expected for the full year or any other period. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this prospectus.

Overview

We are a leading global provider of survey software products that enable organizations to engage with their key constituents, including their customers, employees and the markets they serve. SurveyMonkey has changed the way people gather feedback by making it easy for anyone to create their own online surveys. Our mission is to power curious individuals and organizations to measure, benchmark and act on the opinions that drive success. Our People Powered Data platform enables conversations at scale to deliver impactful customer, employee and market insights to our over 16 million active users globally.

Our widely adopted cloud-based SaaS platform helps individuals and organizations design and distribute surveys that generate an average of more than 20 million answered questions daily across more than 190 countries and territories. Every day our survey platform is used to collect and analyze feedback for a broad range of use cases, such as collecting NPS data from customers, measuring employee engagement, or conducting market research regarding the attributes of a future product offering. Our products drive actionable insights that allow organizations to solve mission-critical business problems, including enhancing customer experience and loyalty, increasing employee productivity and retention and optimizing product and marketing investments.

We were founded and launched our first product in 1999. Our initial focus was to make survey creation available, easy and user-friendly to facilitate the collection and analysis of constituent feedback for people around the world. We have continually enhanced the power and functionality of our survey platform to enable decision makers within organizations to ask questions so they can measure, benchmark and act to drive better and faster decision making. We extended our initial survey offerings by developing an enterprise-grade survey platform that provides managed user accounts, customized company branding, enterprise-grade security, sophisticated collaboration capabilities and deep integrations with a broad set of leading software applications. We have also augmented our survey platform with a broad range of purpose-built solutions for organizations of all sizes.

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We generate substantially all of our revenue from the sale of subscriptions to our products. In addition to our free basic survey product, we offer multiple tiers of subscriptions to individual users—Standard, Advantage and Premier—that provide a compelling range of functionality and features to power the collection and analysis of feedback.

We also offer an enterprise-grade version of our survey platform, SurveyMonkey Enterprise, which provides managed user accounts, customized company branding, enterprise-grade security, sophisticated collaboration capabilities and deep integrations with a broad set of leading software applications. Pricing for our SurveyMonkey Enterprise deployments is negotiated with organizations based on functionality and number of users. We also recently introduced Team Advantage and Team Premier plans, which are focused on users with individual subscriptions who would benefit from additional collaboration features but do not need the full

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suite of enhanced capabilities of SurveyMonkey Enterprise. We believe these plans are an additional way to monetize our free users by converting them to individual paying users in situations where an organization may choose not to adopt SurveyMonkey Enterprise or to deploy SurveyMonkey Enterprise in a limited capacity. In addition, we generate revenue from a wide range of purpose-built solutions, including SurveyMonkey CX for customer experience and feedback, TechValidate for content marketing, SurveyMonkey Engage for employee engagement and SurveyMonkey Audience for market research and analysis. We generate revenue from these purpose-built solutions by subscription or on a transactional basis, depending on the product.

We have a predictable, high-visibility revenue model. In 2017, we generated over 90% of our revenue from sales of subscriptions to our products, and over 75% of our revenue was from individuals and organizations that were customers in 2016. Individual paying users, who are all self-serve, can choose between monthly or annual subscriptions, and as of June 30, 2018, approximately 75% of these customers were on annual subscriptions that were paid in advance. Customers of SurveyMonkey Enterprise make a minimum one-year subscription commitment and are increasingly purchasing multi-year subscriptions, which will further increase the predictability of our revenue model.

We offer customers the ability to pay in 39 different currencies, and in 2017, we generated 35% of our revenue from customers outside of the United States. We have a broad and diverse customer base, and in 2016, 2017 and the six months ended June 30, 2018, no customer represented more than 1% of our revenue.

Our self-serve offering underpins a powerful, capital-efficient business model that is fueled by the virality of our products. We believe our brand is synonymous with high quality, easy-to-use products. The strength of our brand enables us to rapidly and cost-effectively acquire new users through free organic searches, paid online marketing and word-of-mouth referrals. Our survey platform and purpose-built solutions can be used without costly implementation, professional services or training, and anyone can create a survey in minutes. Our free basic survey product allows users to design and send simple surveys to collect and analyze feedback. Users and respondents can access our survey platform on a broad range of desktop and mobile devices, and surveys can be distributed through multiple channels, such as email, web, mobile, messaging apps and social media. Users often share results and collaborate with others, who are then attracted to our survey platform and frequently sign up as new users. Every person who takes a survey is a potential future customer, and we seek to capitalize on that opportunity through end-of-survey marketing designed to engage further with respondents and encourage them to create accounts and become new users.

The virality of our self-serve offering drives brand awareness and creates opportunities to acquire new users cost-effectively. As a result, approximately 80% of our new individual paying users come to us directly through our website or organic online search. We invest in new features and improvements to our product functionality as well as targeted marketing campaigns to drive conversion of unpaid users to paying users. We supplement our self-serve channel with a targeted sales effort that focuses on selling SurveyMonkey Enterprise and our purpose-built solutions.

We believe our existing user base represents a significant opportunity to expand our business and increase our revenue. Since our founding, we have attracted an aggregate of over 60 million registered users to our survey platform globally. Of those registered users, over 16 million users were active within the past year. We have over 600,000 paying users across more than 300,000 organizational domains, and we have paying users in 98% of the Fortune 500, 71 of which have an organization-level agreement with us and the remainder of which have at least one individual paying user within their organization. Additionally, for the six months ended June 30, 2018, we generated approximately 12% of our revenue from customers that had an organization-level agreement with us, and we had over 2,900 customers with organization-level agreements as of June 30, 2018. Based on an internal survey, we believe that over 80% of our paying users utilize our products for business purposes, and we believe the individual paying users within organizational domains in the Fortune 500 and within other organizations represent an opportunity to significantly increase conversion from individual subscriptions to our enterprise offerings. We are focused on converting unpaid users to paying users, upselling organizations to SurveyMonkey Enterprise plans and cross-selling purpose-built solutions to organizations.

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We have invested in our proprietary systems to enhance our targeted selling efforts to both convert unpaid users to paying users and to broaden and deepen our organizational relationships. This includes Customer 360, our internally developed and proprietary, signal-based system fueled by our data science models. Customer 360 leverages heuristic data and activity data to identify individual users that would benefit from a paid subscription plan. The system acts as a trigger for our automated individual engagement tools, including email marketing, end-of-survey splash screens and in-product messaging. We similarly utilize Customer 360 to drive sales to existing and potential organizational customers. The system leverages historical usage data, sales relationship data and firmographic data to predict organizational customer usage and purchasing patterns. Once Customer 360 identifies high value opportunities from among our user base, it then provides our salesforce with information on the likelihood that a potential or existing organizational customer will purchase products, the best sequence to sell our products and other sales information and strategies tailored to the organization. We use Customer 360 to upsell organizations to SurveyMonkey Enterprise, to expand deployments of SurveyMonkey Enterprise within organizations and to cross-sell purpose-built solutions within organizations. We believe there is a significant opportunity to drive sales within organizations, and we intend to further invest in Customer 360 and our salesforce to increase our revenue from organizations where we have a presence that could be further monetized.

Our efficient customer acquisition model enables us to spend a smaller proportion of our revenue on sales and marketing relative to many other enterprise software companies. Comparatively, we are able to invest a higher proportion of our revenue in developing our products. These investments enable us to strengthen our product advantage with new or enhanced products that are innovative and powerful but also easy to adopt and use. In 2016 and 2017 and the six months ended June 30, 2017 and 2018, we invested $59.7 million, $72.1 million, $35.4 million and $40.5 million, respectively, in research and development, including software development that is capitalized. While continuing to focus our efforts on further developing our products, we also intend to accelerate our investment in our salesforce to capture our large market opportunity. This includes driving revenue from upselling and cross-selling within organizations. We believe we can scale these sales investments efficiently due to our large base of active users and the advantages provided by Customer 360.

We have a history of delivering revenue growth. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, our revenue was $207.3 million, $218.8 million, $106.5 million and $121.2 million, respectively. For 2016 and 2017, our core revenue was $192.1 million and $214.0 million, respectively, representing year-over-year growth of 11.4%, and for the six months ended June 30, 2017 and 2018, our core revenue was $102.1 million and $121.2 million, respectively, representing period-over-period growth of 18.7%.

We have also delivered strong cash flow from operations. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, we generated cash flow from operations of $35.8 million, $45.0 million, $14.8 million and $22.0 million, respectively. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, our free cash flow was $(4.9) million, $5.6 million, $(6.7) million and $11.8 million, respectively, which included cash payments for interest on our long-term debt of $19.8 million, $19.9 million, $10.0 million and $10.8 million, respectively, a one-time deferred payment of $7.7 million in the first quarter of 2017 related to our acquisition of TechValidate and $4.3 million in third-party fees related to the refinancing of our credit facilities in the second quarter of 2017. We expect our free cash flow to increase as we reduce cash paid for interest on our long-term debt following the partial repayment of the outstanding indebtedness under our credit facilities using a portion of the proceeds from this offering.

We incurred net losses of $76.4 million, $24.0 million, $19.1 million and $27.2 million for 2016 and 2017, and for the six months ended June 30, 2017 and 2018, respectively, as we continue to invest in our business to capture our large market opportunity.

Core revenue and free cash flow are not financial measures under U.S. generally accepted accounting principles, or GAAP. See “—Non-GAAP Financial Measures” below for explanations of how we calculated these measures and for reconciliations to the most directly comparable GAAP financial measures.

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Our Valuable Customer Base

Our products power the curious, and particularly for work. As of June 30, 2018, over 85% of our annualized revenue was from domain-based customers, which are customers who register with us using an email account with an organizational domain name, such as @surveymonkey.com, but excludes customers with email addresses hosted on widely used domains such as @gmail, @outlook or @yahoo. While a paying user may register for an account using an organizational domain and use the account for personal reasons, based on an internal survey, we believe that over 80% of our paying users utilize our products for business purposes, and this drives our results of operations.

Our customer base is also loyal, and, when combined with our powerful subscription-based revenue model, has enhanced the predictability of our business and results of operations. In 2017, we generated over 90% of our revenue from the sales of subscriptions to our products, and over 75% of our revenue was from individuals and organizations that were customers in 2016. For the six months ended June 30, 2018, approximately 75% of our annualized revenue from domain-based customers came from customers that had been paying users for at least three years. In addition, our organizational dollar-based net retention rate has consistently been above 95%. We calculate organizational dollar-based net retention rate as of the end of a period by starting with the annualized revenue from the cohort of all domain-based customers as of the 12 months prior to the end of such period, or the Prior Period Annualized Organizational Revenue. We then calculate the annualized revenue from these same customers as of the end of the current period, or the Current Period Annualized Organizational Revenue. We then divide Current Period Annualized Organizational Revenue by Prior Period Annualized Organizational Revenue to calculate our organizational dollar-based net retention rate. Organizational dollar-based net retention rate reflects upsells, contraction and attrition within our domain-based customers that are included in the relevant cohort.

Additionally, our dollar-based net retention rate for individual users that had an annual subscription to our products, or individual dollar-based net retention rate, has consistently been above 80%. We calculate individual dollar-based net retention rate as of the end of a period by starting with the annualized revenue from the cohort of all individual paying users as of the 12 months prior to the end of such period, or the Prior Period Annualized Individual Revenue. We then calculate the annualized revenue from these same individual paying users as of the end of the current period, or the Current Period Annualized Individual Revenue. We then divide Current Period Annualized Individual Revenue by Prior Period Annualized Individual Revenue to calculate our individual dollar-based net retention rate. Individual dollar-based net retention rate reflects upsells and attrition of individual paying user accounts. We believe that our organizational dollar-based net retention rate and our individual dollar-based net retention rate reflect our ability to retain our customers.

Key Factors Affecting our Performance

We believe that the growth of our business and our future success depends upon many factors, including cost-effectively attracting new users, monetizing our existing user base, investing in growth and expanding our international footprint. While each of these areas presents significant opportunities for us, they also pose important challenges that we must successfully address in order to continue to grow our business and further improve our results of operations.

Cost-Effectively Attract Users

Our business model is based in part on attracting new users to our survey platform. As of June 30, 2018, we had over 60 million registered users and over 16 million active users globally. The virality of our self-serve offering drives brand awareness and creates opportunities to acquire new users cost-effectively. Every person who takes a survey is a potential future customer, and we seek to capitalize on that opportunity through end-of-survey marketing designed to encourage respondents to create accounts and become users. As our users send more surveys, they generate additional opportunities for us to acquire new users. The majority of our new registered users come to us from organic channels. We intend to continue to invest in improving our products to

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drive additional usage and engagement, as well as marketing activities, including paid online search, display advertising and events, to continue to drive brand awareness and adoption of our survey platform.

Monetizing Our User Base

Our success depends on monetizing our user base by converting unpaid users to paying users, upselling organizations to SurveyMonkey Enterprise and then expanding their deployments and cross-selling organizational users to purpose-built solutions. We offer free basic access to our survey platform for individuals, who in turn can upgrade to our paid subscription offerings for additional features and functionality. Individual users often bring us into their organizations for business purposes, and from there we seek to establish an organizational relationship through the deployment of SurveyMonkey Enterprise. We have over 600,000 paying users across more than 300,000 organizational domains, and we believe that there is a large embedded growth opportunity to convert many of these organizations to SurveyMonkey Enterprise customers. For example, since the beginning of 2017, the annualized revenue from new sales of our SurveyMonkey Enterprise plan have represented an approximately 4x increase over the total annualized revenue from the individual paid subscriptions from those organizational domains over the prior 12 month period. This growth is driven primarily by the increase in the number of paying users that an organizational customer adds to our survey platform upon adoption of SurveyMonkey Enterprise, partially offset by a decrease in ARPU.

Our continued success depends in part on our ability to offer enhanced features for SurveyMonkey Enterprise to convert users from our other paid subscription plans and from our basic plan. As we scale within organizations, we seek to further grow the business relationship by cross-selling purpose-built solutions, such as SurveyMonkey CX, TechValidate or SurveyMonkey Audience, to the marketing organization or SurveyMonkey Engage to the human resources department. We intend to further invest in Customer 360 and our salesforce to increase our revenue from organizations where we have a presence that could be further monetized. As an increasing portion of our sales efforts are targeted at organizations, we will require additional sales and support personnel, which will increase our cost of revenue and operating expenses. We may also need to invest more in marketing and customer education and to develop or enhance our product features, and we may experience greater pricing pressures when negotiating with organizations. Additionally, although we may face longer sales cycles and less predictability in the completion of some of our sales, we expect that our revenue will increase as more organizations convert to our SurveyMonkey Enterprise plan and expand deployments. We further expect that, as more organizations convert to SurveyMonkey Enterprise plans and we increase adoption of Team Advantage and Team Premier plans, revenue may increase and ARPU may decline, because pricing for SurveyMonkey Enterprise plans and Team Advantage and Team Premier plans are often discounted on a per user basis compared to individual subscription plans. We also expect to continue to expand sales of our purpose-built solutions among our organizational customers, which we anticipate may increase revenue and ARPU, because our purpose-built solutions are typically at higher price points than subscriptions to our survey platform. We expect that ARPU will vary from period to period depending on the mix of products sold as we continue to extend our sales efforts within organizations.

Investment in Growth

We intend to continue to invest in our business so that we can capitalize on our large market opportunity. We plan to further invest in research and development by hiring additional employees to continually improve our broad and powerful survey platform and purpose-built solutions, including by developing new products, and further enhancing Customer 360 and SurveyMonkey Genius. We also plan to continue to grow our sales organization and invest in our marketing efforts, including user conferences, events and lead generation for our SurveyMonkey Enterprise and purpose-built solutions selling efforts. We also expect to incur general and administrative expenses to support our growth and our transition to being a publicly traded company.

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Expansion of International Footprint

We intend to continue to invest in our international operations to grow our business outside of the United States. In 2017, we generated 35% of our revenue from customers outside of the United States. We see a significant opportunity to expand our revenue outside of the United States by investing in a more localized product experience, marketing to increase brand awareness and growing an international sales effort led out of our Ireland office. In addition, we intend to invest in additional public cloud points of presence outside of the United States to enhance website speed, improve user experience and enable data to be stored in local markets.

Key Business Metric

We review a number of operating and financial metrics, including the following key metric to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plan and make strategic decisions.

	As of December 31,				As of June 30,
(in thousands)	2016		2017		2017		2018
Paying users		575		606		598		616

Paying users

We define a paying user as an individual customer of our survey platform or form-based application, a seat within a SurveyMonkey Enterprise deployment or a subscription to one of our purpose-built solutions, in each case as of the end of a period. One person would count as multiple paying users if the person had more than one paid license at the end of the period. For example, if an individual paying user also had a designated seat in a SurveyMonkey Enterprise deployment, we would count that person as two paying users. Paying users is an indicator of the scale of our business and an important factor in our ability to increase our revenue.

Non-GAAP Financial Measures

We believe that, in addition to our results determined in accordance with GAAP, core revenue, average revenue per paying user, free cash flow and adjusted EBITDA, all of which are non-GAAP financial measures, are useful in evaluating our business, results of operations and financial condition.

	Year Ended December 31,					Six Months Ended June 30,
(in thousands, except ARPU)	2016			2017		2017			2018
Core revenue	$	192,056		$	213,984	$	102,062		$	121,187
Average revenue per paying user (ARPU)		349			362		351			400
Free cash flow		(4,895	)		5,579		(6,718	)		11,755
Adjusted EBITDA		64,721			61,882		31,060			28,427

Core revenue

We define core revenue as revenue from our survey platform, form-based application and purpose-built solutions, excluding the non-self-serve portion of SurveyMonkey Audience, which we generally ceased offering at the end of the second quarter of 2017. We consider core revenue to be an important measure because it excludes revenue from an offering that we generally no longer provide, and so provides a better understanding of our current business and provides comparability of our results of operations over time. Core revenue has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as revenue. Some of the limitations of core revenue are that it does not reflect all of our revenue in the periods presented and that our results of operations for the periods presented reflect expenses that we incurred to generate revenue that is excluded from core revenue.

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The following is a reconciliation of core revenue to the most comparable GAAP measure, revenue:

	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2016			2017			2017			2018
Revenue	$	207,295		$	218,773		$	106,452		$	121,187
Non-self-serve SurveyMonkey Audience revenue		(15,239	)		(4,789	)		(4,390	)		—
Core revenue	$	192,056		$	213,984		$	102,062		$	121,187

	Three Months Ended
(in thousands)	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017		March 31, 2018		June 30, 2018
Revenue	$	52,934		$	53,518		$	55,309		$	57,012	$	58,491	$	62,696
Non-self-serve SurveyMonkey Audience revenue		(2,748	)		(1,642	)		(399	)		—		—		—
Core revenue	$	50,186		$	51,876		$	54,910		$	57,012	$	58,491	$	62,696

Average revenue per paying user

We define ARPU as core revenue divided by the average number of paying users during the period. For interim periods, we use annualized core revenue which is calculated by dividing the core revenue for the period by the number of days in that period and multiplying this value by 365 days. We calculate the average number of paying users by adding the number of paying users as of the end of the prior period to the number of paying users as of the end of the current period, and then dividing by two. We consider ARPU to be an important measure because it helps illustrate underlying trends in our business by showing investors the changes in per user revenue, which is a reflection of our ability to successfully upsell or cross-sell our products and purpose-built solutions. ARPU has limitations as an analytic tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures. Some of the limitations of ARPU are that it is a calculation that does not reflect revenue from the non-self-serve portion of our SurveyMonkey Audience solution in any of the periods presented, and also does not reflect expenses that we incurred to generate revenue that is excluded from core revenue.

Free cash flow

We define free cash flow as GAAP net cash provided by operating activities less purchases of property and equipment, net of tenant improvement reimbursements, and capitalized internal-use software. We consider free cash flow to be an important measure because it measures our liquidity after deducting capital expenditures for purchases of property and equipment and capitalized software development costs, which we believe provides a more accurate view of our cash generation and cash available to grow our business. For 2016 and 2017, and for the six months ended June 30, 2017 and 2018, our free cash flow included cash payments for interest on our long-term debt of $19.8 million, $19.9 million, $10.0 million and $10.8 million, respectively. Free cash flow also included a one-time deferred payment of $7.7 million in the first quarter of 2017 related to our acquisition of TechValidate and $4.3 million in third-party fees related to the refinancing of our credit facilities in the second quarter of 2017. We expect our free cash flow to increase as we reduce cash paid for interest on our long-term debt following the partial repayment of the outstanding indebtedness under our credit facilities using a portion of the proceeds from this offering. We expect to generate positive free cash flow over the long term. Free cash flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities. Some of the limitations of free cash flow are that free cash flow does not reflect our future contractual commitments and may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure.

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The following is a reconciliation of free cash flow to the most comparable GAAP measure, net cash provided by operating activities:

	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2016			2017			2017			2018
Net cash provided by operating activities	$	35,842		$	45,026		$	14,765		$	22,031
Purchases of property and equipment, net(1)		(24,903	)		(24,128	)		(12,952	)		(4,809	)
Capitalized internal-use software		(15,834	)		(15,319	)		(8,531	)		(5,467	)
Free cash flow	$	(4,895	)	$	5,579		$	(6,718	)	$	11,755

⁽¹⁾  Includes reimbursement of tenant improvement allowances under our lease financing obligation.

Adjusted EBITDA

We define adjusted EBITDA as net loss excluding interest expense, provision for (benefit from) income taxes, depreciation and amortization, other non-operating expenses (income), net, stock-based compensation and restructuring, acquisition-related and financing costs. We consider adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that are not indicative of the core operating performance of our business that are excluded from adjusted EBITDA. Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures. Some of the limitations of adjusted EBITDA are that it excludes recurring expenses for interest payments, does not reflect the dilution that results from stock-based compensation, and does not reflect the cost to replace depreciated property and equipment. It may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure.

The following is a reconciliation of adjusted EBITDA to the most comparable GAAP measure, net loss:

	Year Ended December 31,					Six Months Ended June 30,
(in thousands)	2016		2017			2017			2018
Net loss		$  (76,350)	$	(24,010	)		$  (19,097	)		$  (27,180	)
Provision for (benefit from) income taxes		4,704		(16,047	)		2,400			296
Other non-operating expenses (income)		4,250		(7,610	)		(7,176	)		(351	)
Interest expense(1)		32,893		26,865			13,316			14,685
Depreciation and amortization(2)		36,698		42,391			20,009			23,652
Stock-based compensation		32,957		34,986			17,941			17,292
Restructuring costs(3)		23,182		1,785			145			33
Acquisition-related costs		6,387		347			347			—
Financing costs		—		3,175			3,175			—
Adjusted EBITDA	$	64,721	$	61,882		$	31,060		$	28,427

⁽¹⁾  Includes interest expense on our credit facilities and financing lease obligations related to our corporate headquarters.

⁽²⁾  Includes amortization of deferred commissions.

⁽³⁾  Excludes $2.1 million of stock-based compensation in 2016, which is included in the stock-based compensation line item above.

Core revenue, ARPU, free cash flow and adjusted EBITDA are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.

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2016 and 2017 Restructurings

In 2016 and 2017, we restructured our business to focus on our core products, increase operating efficiency and reduce costs over the long-term. In November 2017, in conjunction with the hiring of our new Chief Sales Officer, we implemented a plan to centralize our U.S. salesforce in our San Mateo, California headquarters. In November 2016, we implemented a plan to wind down the operations of a previously acquired business. In March 2016, we implemented a plan to reduce our sales and marketing headcount and to close several international offices, which was primarily related to our decision to generally cease offering the non-self serve portion of our SurveyMonkey Audience solution. We recognized aggregate restructuring costs of $25.3 million in 2016, which included $2.1 million of stock-based compensation, $1.8 million in 2017, $145,000 in the six months ended June 30, 2017 and $33,000 in the six months ended June 30, 2018. As of December 31, 2017 and June 30, 2018, $1.4 million and $0.8 million, respectively, has been accrued primarily related to the restructurings and non-cancellable lease costs, which amounts will be paid through 2020.

Components of Results of Operations

Revenue

We derive revenue primarily from sales of subscriptions to our products.

We recognize revenue ratably over the subscription term, generally ranging from one month to one year, as long as all other revenue recognition criteria have been met. We have an increasing proportion of multi-year contracts with organizations. Our contracts are generally non-cancellable and do not contain refund provisions. Subscription fees are collected primarily from credit cards through our website at the beginning of the subscription period.

We also generate a small portion of revenue from one of our purpose-built solutions that we sell on a transactional basis.

No customer represented more than 1% of our revenue in any of the periods presented.

Cost of Revenue and Operating Expenses

We allocate shared costs, such as depreciation on equipment shared by all departments, facilities (including rent and utilities), employee benefit costs and information technology costs to all departments based on headcount. As such, allocated shared costs are reflected in each cost of revenue and operating expense category, other than restructuring.

Cost of Revenue. Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products to our users. These expenses generally consist of infrastructure costs, personnel costs and other related costs. Infrastructure costs generally include expenses related to the operation of our data centers, such as data center equipment depreciation, facility costs (such as co-location rentals), amortization of capitalized software, payment processing fees, website hosting costs, external sample costs and charitable donations associated with our SurveyMonkey Audience solution. Personnel costs include salaries, bonuses, stock-based compensation, other employee benefits and travel-related expenses for employees whose primary responsibilities relate to supporting our infrastructure and delivering user support. Other related costs include amortization of acquired developed technology intangible assets and allocated overhead. We plan to continue investing in additional resources to enhance the capability and reliability of our infrastructure to support user growth and increased use of our products. We expect that cost of revenue will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue.

Research and Development. Research and development expenses primarily include personnel costs, costs for third-party consultants, depreciation of equipment used in research and development activities and

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allocated overhead. Personnel costs for our research and development organization include salaries, bonuses, stock-based compensation, other employee benefits and travel-related expenses. Our research and development efforts focus on maintaining and enhancing existing products and adding new products. Except for costs associated with the development of internal-use software, research and development costs are expensed as incurred. We expect that research and development expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue in the near term. We expect that research and development expenses will remain relatively constant as a percentage of revenue in the long term.

Sales and Marketing. Sales and marketing expenses primarily include personnel costs, costs related to brand campaigns, paid marketing, amortization of acquired trade name and customer relationship intangible assets and allocated overhead. Personnel costs for our sales and marketing organization include salaries, bonuses, sales commissions, stock-based compensation, other employee benefits and travel-related expenses. Sales commissions earned by our sales personnel, including any related payroll taxes, that are considered to be incremental and recoverable costs of obtaining a customer contract are deferred and amortized over an estimated period of benefit of generally four years. We expect that sales and marketing expenses will increase in absolute dollars in future periods and increase as a percentage of revenue in the near term. We expect that sales and marketing expenses will vary from period to period in the long term.

General and Administrative. General and administrative expenses primarily include personnel costs for legal, finance, human resources and other administrative functions, as well as certain executives. Personnel costs for our general and administrative staff include salaries, bonuses, stock-based compensation, other employee benefits and travel-related expenses. In addition, general and administrative expenses include outside legal, accounting and other professional fees, non-income-based taxes and allocated overhead. We expect that general and administrative expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue in the near term. We expect that general and administrative expenses will decrease as a percentage of revenue in the long term.

Restructuring. Restructuring expenses primarily include personnel costs, lease termination expenses and the derecognition of goodwill and intangible assets. Personnel costs related to the restructurings include severance payments, stock-based compensation and other benefits. Lease termination expenses related to the restructurings include non-cancellable lease costs from vacated facilities. The derecognition of goodwill and intangible assets related to an acquisition that was not integrated into our business and for which no future economic benefit exists. See “—2016 and 2017 Restructurings” above for additional information.

Interest Expense

Interest expense consist of interest on credit facilities and financing obligations related to our corporate headquarters. We expect interest expense to decrease following the repayment of a portion of our outstanding indebtedness under our credit facilities in connection with this offering. For additional information regarding our credit facilities and financing obligations, see Notes 8 and 13, respectively, of the Notes to Consolidated Financial Statements included elsewhere in this prospectus.

Other Non-Operating Income (Expense), Net

Other non-operating income (expense), net consists primarily of interest income, net foreign currency exchange gains (losses), gain on sale of private company investments and net realized gains and losses related to investments.

Provision for (Benefit from) Income Taxes

Provision for (benefit from) income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on our federal and state deferred tax assets that we have determined are not realizable on a more likely than not basis. For additional information regarding our income taxes, see Note 9 of the Notes to Consolidated Financial Statements included elsewhere in this prospectus.

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Results of Operations

The following tables set forth our results of operations for the periods presented and as a percentage of our revenue for those periods. Percentages presented in the following tables may not sum due to rounding.

Comparison of the Six Months Ended June 30, 2017 and 2018

	Six Months Ended June 30,
	2017						2018
(dollars in thousands)				% of Revenue						% of Revenue
Revenue	$	106,452			100	%	$	121,187			100	%
Cost of revenue(1)(2)		30,842			29	%		35,754			30	%
Gross profit		75,610			71	%		85,433			70	%
Operating expenses:
Research and development(1)		24,980			23	%		34,232			28	%
Sales and marketing(1)(2)		36,913			35	%		37,300			31	%
General and administrative(1)		24,129			23	%		26,418			22	%
Restructuring(1)		145			—	%		33			—	%
Total operating expenses		86,167			81	%		97,983			81	%
Loss from operations		(10,557	)		(10	)%		(12,550	)		(10	)%
Interest expense		13,316			13	%		14,685			12	%
Other non-operating income, net		7,176			7	%		351			—	%
Loss before income taxes		(16,697	)		(16	)%		(26,884	)		(22	)%
Provision for income taxes		2,400			2	%		296			—	%
Net loss	$	(19,097	)		(18	)%	$	(27,180	)		(22	)%

⁽¹⁾ Includes stock-based compensation, net of amounts capitalized as follows:

	Six Months Ended June 30,
	2017					2018
(dollars in thousands)			% of Revenue					% of Revenue
Cost of revenue	$	1,236		1	%	$	1,304		1	%
Research and development		4,266		4	%		6,413		5	%
Sales and marketing		5,300		5	%		1,915		2	%
General and administrative		7,139		7	%		7,660		6	%
Stock-based compensation, net of amounts capitalized	$	17,941		17	%	$	17,292		14	%

⁽²⁾ Includes amortization of acquired intangible assets as follows:

	Six Months Ended June 30,
	2017					2018
(dollars in thousands)			% of Revenue					% of Revenue
Cost of revenue	$	1,064		1	%	$	976		1	%
Sales and marketing		1,213		1	%		1,208		1	%
Amortization of acquired intangible assets	$	2,277		2	%	$	2,184		2	%

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Revenue and cost of revenue

	Six Months Ended June 30,
(dollars in thousands)	2017			2018			$ Change		% Change
Revenue	$	106,452		$	121,187		$	14,735		14	%
Cost of revenue		30,842			35,754			4,912		16	%
Gross profit	$	75,610		$	85,433		$	9,823		13	%
Gross margin		71	%		70	%

Revenue increased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to an increase in ARPU from $351 as of June 30, 2017 to $400 as of June 30, 2018, which was largely driven by a change to our individual user plans in 2017 that offered paying users new plans with more functionality and required our users to renew their subscriptions at higher price points. The increase in revenue was also due in part to an increase in the number of paying users from approximately 598,000 as of June 30, 2017 to 616,000 as of June 30, 2018. Approximately 80% of the increase in revenue was attributable to the increase in ARPU, which grew primarily as a result of the price increases in the second quarter of 2017, and approximately 20% of the increase in revenue was attributable to the increase in the number of paying users. The increase in revenue was partially offset by a $4.4 million decrease in revenue related to our having ceased offering the non-self-serve version of our SurveyMonkey Audience solution at the end of the second quarter of 2017.

Cost of revenue increased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to a $1.8 million increase in personnel costs, due to headcount growth, a $1.1 million increase in amortization of capitalized software costs, a $1.1 million increase in facilities costs and a $0.6 million increase in payment processing expenses due to increased sales.

As a result of the increase in our cost of revenue, our gross margin decreased for the six months ended June 30, 2018 as compared to the six months ended June 30, 2017.

Research and development

	Six Months Ended June 30,
(dollars in thousands)	2017		2018		$ Change		% Change
Research and development	$	24,980	$	34,232	$	9,252		37%

Research and development expenses increased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to an increase of $3.1 million in personnel costs due to headcount growth, a decrease in the software development costs that qualified for capitalization of $5.0 million and a $0.5 million increase in expenses for third-party consultants.

Sales and marketing

	Six Months Ended June 30,
(dollars in thousands)	2017		2018		$ Change		% Change
Sales and marketing	$	36,913	$	37,300	$	387		1%

Sales and marketing expenses remained relatively flat for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to an increase of $1.5 million in costs related to brand campaigns and paid marketing, partially offset by a $1.3 million decrease in personnel costs due to employee terminations.

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General and administrative

	Six Months Ended June 30,
(dollars in thousands)	2017		2018		$ Change		% Change
General and administrative	$	24,129	$	26,418	$	2,289		9%

General and administrative expenses increased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to an increase in personnel costs of $5.0 million due to increased headcount and a $1.0 million increase in outside legal, accounting and other professional fees related primarily to adoption of ASC 606 and preparation for becoming a public company. These increases were partially offset by a decrease of $0.7 million in facilities costs. In addition, we incurred $3.2 million of transaction fees during the six months ended June 30, 2017 related to our 2017 Credit Facility which did not recur in the six months ended June 30, 2018.

Restructuring

	Six Months Ended June 30,
(dollars in thousands)	2017		2018		$ Change			% Change
Restructuring		$  145	$	33	$	(112	)		(77	)%

Restructuring expenses decreased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to the timing of expenses related to the November 2017 restructuring plan.

Interest expense

	Six Months Ended June 30,
(dollars in thousands)	2017		2018		$ Change		% Change
Interest expense	$	13,316	$	14,685	$	1,369		10%

Interest expense increased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to higher average interest rates.

Other non-operating income, net

	Six Months Ended June 30,
(dollars in thousands)	2017		2018		$ Change			% Change
Other non-operating income, net	$	7,176	$	351	$	(6,825	)		(95	)%

Other non-operating income, net decreased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to our sale of a private company investment in January 2017 in which a $6.7 million gain in the six months ended June 30, 2017 was recognized. An additional earn-out payment of $1.0 million was subsequently received on this sale and a corresponding gain was recognized during the six months ended June 30, 2018. During the six months ended June 30, 2018, we also recognized foreign currency losses of $0.7 million as compared to foreign currency gains of $0.6 million recognized during the six months ended June 30, 2017.

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Provision for income taxes

	Six Months Ended June 30,
(dollars in thousands)	2017			2018			$ Change			% Change
Provision for income taxes		$2,400			$    296		$	(2,104	)		(88	)%
Effective tax rate		(14.4	)%		(1.1	)%

The provision for income taxes decreased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017, primarily due to certain provisions in the Tax Act, including a decrease in the U.S. statutory tax rate from 35% to 21% and changes to our valuation allowance.

Comparison of the Years Ended December 31, 2016 and 2017

	Year Ended December 31,
	2016						2017
(dollars in thousands)				% of Revenue						% of Revenue
Revenue	$	207,295			100	%	$	218,773			100	%
Cost of revenue(1)(2)		67,755			33	%		62,679			29	%
Gross profit		139,540			67	%		156,094			71	%
Operating expenses:
Research and development(1)		37,985			18	%		53,660			25	%
Sales and marketing(1)(2)		73,970			36	%		73,511			34	%
General and administrative(1)		36,832			18	%		47,940			22	%
Restructuring(1)		25,256			12	%		1,785			1	%
Total operating expenses		174,043			84	%		176,896			81	%
Loss from operations		(34,503	)		(17	)%		(20,802	)		(10	)%
Interest expense		32,893			16	%		26,865			12	%
Other non-operating income (expense), net		(4,250	)		(2	)%		7,610			3	%
Loss before income taxes		(71,646	)		(35	)%		(40,057	)		(18	)%
Provision for (benefit from) income taxes		4,704			2	%		(16,047	)		(7	)%
Net loss	$	(76,350	)		(37	)%	$	(24,010	)		(11	)%

⁽¹⁾  Includes stock-based compensation, net of amounts capitalized as follows:

	Year Ended December 31,
	2016					2017
(dollars in thousands)			% of Revenue					% of Revenue
Cost of revenue	$	4,114		2	%	$	2,503		1	%
Research and development		5,756		3	%		9,918		5	%
Sales and marketing		8,712		4	%		8,069		4	%
General and administrative		12,301		6	%		14,496		7	%
Restructuring		2,074		1	%		—		—	%
Stock-based compensation, net of amounts capitalized	$	32,957		16	%	$	34,986		16	%

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⁽²⁾  Includes amortization of acquired intangible assets as follows:

	Year Ended December 31,
	2016				2017
(dollars in thousands)			% of Revenue				% of Revenue
Cost of revenue	$	4,505		2%	$	2,040		1%
Sales and marketing		4,267		2%		2,421		1%
Amortization of acquired intangible assets	$	8,772		4%	$	4,461		2%

Revenue and cost of revenue

	Year Ended December 31,
(dollars in thousands)	2016			2017			$ Change			% Change
Revenue	$	207,295		$	218,773		$	11,478			6%
Cost of revenue		67,755			62,679			(5,076	)		(7)%
Gross profit	$	139,540		$	156,094		$	16,554			12%
Gross margin		67	%		71	%

Revenue increased for 2017 compared to the prior year primarily due to an increase the number of paying users from approximately 575,000 in 2016 to 606,000 in 2017. The increase in revenue was also due in part to an increase in ARPU from $349 in 2016 to $362 in 2017, which was largely driven by a change to our individual user plans in 2017 that offered paying users new plans with more functionality and required our users to renew their subscriptions at higher price points. Approximately 67% of the increase in revenue was attributable to the increase in the number of paying users, and approximately 33% of the increase in revenue was attributable to the increase in ARPU. The increase in revenue was partially offset by a $10.5 million decrease in revenue relating to us having ceased offering our non-self-serve version of our SurveyMonkey Audience solution at the end of the second quarter of 2017. In 2017, we generated over 75% of our revenue from individuals and organizations that were customers in 2016, with the remainder of our revenue coming from new customers.

Cost of revenue decreased for 2017 compared to the prior year, primarily due to a $2.5 million decrease in amortization of developed technology due to the de-recognition of acquired intangibles, a $2.0 million decrease in external sample costs as we generally ceased offering our non-self-serve version of our SurveyMonkey Audience solution at the end of the second quarter of 2017, a $2.9 million decrease in personnel costs due to a decrease in headcount and a $1.2 million decrease in external services. These decreases were partially offset by increases of $2.2 million in the amortization of capitalized software, $0.7 million in facilities costs and $0.6 million in payment processing fees due to increased sales.

As a result of the increase in our revenue and the decrease in our cost of revenue, our gross margin increased from 67% in 2016 to 71% in 2017.

Research and development

	Year Ended December 31,
(dollars in thousands)	2016		2017		$ Change		% Change
Research and development	$	37,985	$	53,660	$	15,675		41	%

Research and development expenses increased in 2017 compared to the prior year primarily due to an increase of $9.7 million in personnel costs due to headcount growth, a $2.6 million decrease in the software

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development costs that qualified for capitalization and a $3.7 million increase in facilities costs related to the relocation of our headquarters. These increases were partially offset by acquisition-related deferred compensation becoming fully amortized in 2016.

Sales and marketing

	Year Ended December 31,
(dollars in thousands)	2016		2017		$ Change			% Change
Sales and marketing	$	73,970	$	73,511	$	(459	)		(1	)%

Sales and marketing expenses decreased in 2017 compared to the prior year, primarily due to decreases of $5.0 million in acquisition-related expenses due to deferred compensation related to past acquisitions becoming fully amortized in 2016, $1.8 million in intangible asset amortization due to certain acquired intangible assets becoming fully amortized in 2016, $1.0 million in commissions expense related to our non-self-serve version of SurveyMonkey Audience solution, which we generally ceased offering at the end of the second quarter of 2017, and $0.6 million in stock-based compensation due to employee terminations. These decreases were offset in part by increases of $4.2 million in costs related to brand campaigns and paid marketing, $3.2 million in facilities costs related to the relocation of our headquarters and $0.6 million in consulting services.

General and administrative

	Year Ended December 31,
(dollars in thousands)	2016		2017		$ Change		% Change
General and administrative	$	36,832	$	47,940	$	11,108		30	%

General and administrative expenses increased in 2017 compared to the prior year, primarily due to increases of $5.8 million in personnel costs due to headcount growth, $3.2 million in third-party fees related to the refinancing of our credit facilities, $1.2 million in facilities costs as a result of the relocation of our headquarters, and $0.5 million in outside legal, accounting and other professional fees, related primarily to the adoption of ASC 606 and preparation for this offering.

Restructuring

	Year Ended December 31,
(dollars in thousands)	2016		2017		$ Change			% Change
Restructuring	$	25,256	$	1,785	$	(23,471	)		(93	)%

Restructuring expenses decreased in 2017 compared to the prior year, primarily due to costs incurred in 2016 related to the March 2016 and November 2016 restructuring plans which did not recur in 2017.

Interest expense

	Year Ended December 31,
(dollars in thousands)	2016		2017		$ Change			% Change
Interest expense	$	32,893	$	26,865	$	(6,028	)		(18	)%

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In the fourth quarter of 2016, we vacated the space for our previous headquarters. Upon vacating the previous headquarters facility, we no longer incurred any finance lease obligation costs relating to the previous headquarters facility in 2017. This reduction was partially offset by an increase in finance lease obligation costs associated with our new headquarters.

Other non-operating income (expense), net

	Year Ended December 31,
(dollars in thousands)	2016			2017		$ Change		% Change
Other non-operating income (expense), net	$	(4,250	)	$	7,610	$	11,860		(279	)%

Other non-operating income (expense), net increased in 2017 compared to the prior year, primarily due to our sale of a private company investment which resulted in a $6.7 million gain in 2017 as well as a $2.9 million decrease in foreign currency losses and translation adjustment resulting from the liquidation of one of our international subsidiaries and an increase related to an impairment of $2.2 million for a long-term note receivable in 2016 that was partially offset by the recovery of $1.0 million of the same long-term note receivable in 2017.

Provision for (benefit from) income taxes

	Year Ended December 31,
(dollars in thousands)	2016			2017			$ Change			% Change
Provision for (benefit from) income taxes	$	4,704		$	(16,047	)	$	(20,751	)		(441	)%
Effective tax rate		(6.6	)%		40.1	%

The decrease in our income tax provision in 2017 as compared to the prior year was primarily due to a partial release of valuation allowance in connection with the Tax Act and the decrease in the U.S. statutory rate from 35% to 21%. The tax benefit associated with the release of the valuation allowance was partially offset by income taxes in profitable jurisdictions outside of the United States.

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Quarterly Results of Operations

The following table sets forth our unaudited condensed consolidated statement of operations data for each of the last six quarters in the period ended June 30, 2018. The unaudited quarterly statements of operations data set forth below have been prepared on a basis consistent with our audited annual consolidated financial statements included elsewhere in this prospectus and include, in our opinion, all normal recurring adjustments necessary for the fair presentation of the results of operations for the periods presented. Our historical quarterly results are not necessarily indicative of the results that may be expected in the future and the results in the three months ended June 30, 2018 are not necessarily indicative of results to be expected for the remainder of 2018 or any future period. The following quarterly financial data should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus.

	Three Months Ended
(in thousands)	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017			March 31, 2018			June 30, 2018
Revenue	$	52,934		$	53,518		$	55,309		$	57,012		$	58,491		$	62,696
Cost of revenue(1)(2)		15,429			15,413			16,241			15,596			18,063			17,691
Gross profit		37,505			38,105			39,068			41,416			40,428			45,005
Operating expenses:
Research and development(1)		13,413			11,567			14,910			13,770			17,940			16,292
Sales and marketing(1)(2)		17,142			19,771			18,878			17,720			17,421			19,879
General and administrative(1)		10,321			13,808			11,169			12,642			13,018			13,400
Restructuring(1)		235			(90	)		2			1,638			5			28
Total operating expenses		41,111			45,056			44,959			45,770			48,384			49,599
Loss from operations		(3,606	)		(6,951	)		(5,891	)		(4,354	)		(7,956	)		(4,594	)
Interest expense		6,696			6,620			6,714			6,835			7,094			7,591
Other non-operating income (expense), net		7,032			144			774			(340	)		633			(282	)
Loss before income taxes		(3,270	)		(13,427	)		(11,831	)		(11,529	)		(14,417	)		(12,467	)
Provision for (benefit from) income taxes		1,045			1,355			1,151			(19,598	)		300			(4	)
Net (loss) income	$	(4,315	)	$	(14,782	)	$	(12,982	)	$	8,069		$	(14,717	)	$	(12,463	)

⁽¹⁾  Includes stock-based compensation, net of amounts capitalized as follows:

	Three Months Ended
(in thousands)	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017		March 31, 2018		June 30, 2018
Cost of revenue	$	607	$	629	$	634	$	633	$	658	$	646
Research and development		2,926		1,340		2,799		2,853		3,447		2,966
Sales and marketing		2,181		3,119		1,322		1,447		768		1,147
General and administrative		3,525		3,614		3,667		3,690		3,667		3,993
Stock-based compensation, net of amounts capitalized	$	9,239	$	8,702	$	8,422	$	8,623	$	8,540	$	8,752

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⁽²⁾  Includes amortization of acquired intangible assets as follows:

	Three Months Ended
(in thousands)	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017		March 31, 2018		June 30, 2018
Cost of revenue	$	576	$	488	$	488	$	488	$	488	$	488
Sales and marketing		609		604		604		604		604		604
Amortization of acquired intangible assets	$	1,185	$	1,092	$	1,092	$	1,092	$	1,092	$	1,092

	Three Months Ended
(% of revenue)	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017			March 31, 2018			June 30, 2018
Revenue		100	%		100	%		100	%		100	%		100	%		100%
Cost of revenue		29	%		29	%		29	%		27	%		31	%		28%
Gross profit		71	%		71	%		71	%		73	%		69	%		72%
Operating expenses:
Research and development		25	%		22	%		27	%		24	%		31	%		26%
Sales and marketing		32	%		37	%		34	%		31	%		30	%		32%
General and administrative		19	%		26	%		20	%		22	%		22	%		21%
Restructuring		—	%		—	%		—	%		3	%		—	%		—  %
Total operating expenses		78	%		84	%		81	%		80	%		83	%		79%
Loss from operations		(7	)%		(13	)%		(11	)%		(8	)%		(14	)%		(7)%
Interest expense		13	%		12	%		12	%		12	%		12	%		12%
Other non-operating income (expense), net		13	%		—	%		1	%		(1	)%		1	%		—
Loss before income taxes		(6	)%		(25	)%		(21	)%		(20	)%		(25	)%		(20)%
Provision for (benefit from) income taxes		2	%		3	%		2	%		(34	)%		1	%		—
Net (loss) income		(8	)%		(28	)%		(23	)%		14	%		(25	)%		(20)%

Quarterly Revenue Trends

Our revenue in each of the quarters presented increased sequentially for all subsequent periods primarily due to increases in ARPU and in the number of paying users. Additionally, revenue from the first quarter of 2016 through the end of the second quarter of 2017 was negatively affected as we generally ceased offering SurveyMonkey Audience as a sales-assisted solution which was completed at the end of the second quarter of 2017.

Quarterly Cost of Revenue and Gross Margin Trends

Our cost of revenue fluctuated in each of the quarters presented primarily due to the timing of releases of our product updates, which caused fluctuations in the amortization of capitalized software expenses, and reduced external samples costs related to our SurveyMonkey Audience product as we generally ceased offering sales-assisted solutions at the end of the second quarter of 2017, which combined with fluctuations in our revenue caused our gross margins to also fluctuate.

Quarterly Operating Expenses Trends

Our quarterly operating expenses fluctuated in the quarters presented primarily due to changes in personnel costs, the timing and cost of our product development cycles, marketing programs and the impact of

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our restructuring. Except for the three months ended September 30, 2017, total costs and expenses increased sequentially for all periods presented, primarily due to the addition of headcount in connection with the expansion of our business. Research and development expenses fluctuated in the quarters presented primarily due to the variation in our product development cycles. Our sales and marketing expense also fluctuated in the quarters presented primarily due to the timing of our marketing campaigns. The increase in sales and marketing expense during the second quarter of 2017 included expenses related to our global brand refresh campaign and stock-based compensation expenses related to the modification of an executive stock grant. Our general and administrative expenses fluctuated in the quarters presented primarily due to increases in personnel costs and higher accounting and other professional fees in connection with preparing to be and operating as a public company and our implementation of ASC 606. Our quarterly stock-based compensation expenses included within the respective operating expense line items has generally decreased due to employee terminations. In April 2017, we executed a new credit facility agreement and interest expense has generally increased due to higher effective interest rates on our debt. The variation in other non-operating income (expense), net is generally due to foreign currency gains and losses. In addition, in the three months ended March 31, 2017 and 2018, we recognized a gain on the sale of a private company investment.

Seasonality

We have historically experienced seasonality in terms of when we enter into subscription agreements with customers. We typically enter into a lower percentage of agreements with new customers, as well as renewal agreements with existing customers, during the summer months and during the holiday season in the second and fourth quarter of each year.

Key Business Metric

	As of
(in thousands)	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017		March 31, 2018		June 30, 2018
Paying users		596		598		600		606		610		616

See “—Key Business Metric—Paying users” above for additional information.

Non-GAAP Financial Measures

	Three Months Ended
	March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
	2017		2017		2017		2017		2018		2018
Core revenue (in thousands)	$	50,186	$	51,876	$	54,910	$	57,012	$	58,491	$	62,696
Average revenue per paying user		348		349		364		375		390		410

See “—Non-GAAP Financial Measures” above for explanations of how we calculated these measures and for reconciliations to the most directly comparable GAAP financial measures.

Liquidity and Capital Resources

As of December 31, 2017 and June 30, 2018, our principal sources of liquidity were cash and cash equivalents totaling $35.3 million and $43.4 million, respectively, all of which were bank deposits as well as cash to be received from customers and cash available under our credit facilities.

Since our inception, we have financed our operations primarily through private sales of equity securities and payments received from our customers and our credit facilities in the form of revolving lines of credit. We

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believe our existing cash and cash equivalents, our credit facilities and cash provided by sales of our products will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements will depend on many factors, including the timing and amount of cash received from customers, the timing and extent of spending to support research and development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced product offerings and the continuing market adoption of our products. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our results of operations.

In February 2013, we entered into a credit agreement, or the 2013 Credit Facility, which was subsequently amended at various dates primarily to revise certain financial covenants and ratios, permit certain transactions, increase the facility and extend the maturity date. As modified, the 2013 Credit Facility consisted of a $315.0 million term loan and $75.0 million revolving credit facility.

In April 2017, we entered into a refinancing facility agreement, or the 2017 Credit Facility, consisting of a $300.0 million term loan and $75.0 million revolving credit facility. Upon execution of the 2017 Credit Agreement, the term loan under the 2013 Credit Facility was substantially modified and partially extinguished. Interest under the 2017 Credit Facility is based upon a base interest rate and adjusted for LIBOR. The base interest rates for the term loan and revolving credit facility are 4.5% and 4.0%, respectively. Periodic principal payments on the term loan are due quarterly at an amount equal to 0.25% of the aggregate amount of all term loans outstanding. The remaining principal amounts on the term loan are due on April 13, 2024. The principal amount on the revolving credit facility is due on April 13, 2022. As of both December 31, 2017 and June 30, 2018, we had $42.2 million of borrowing availability under the revolving credit facility portion of our 2017 Credit Facility.

A significant majority of our customers pay in advance for annual subscriptions, which is a substantial source of cash. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which we recognized as revenue in accordance with our revenue recognition policy. As of December 31, 2017 and June 30, 2018, we had deferred revenue of $85.1 million and $99.6 million, respectively, a substantial majority of which we expect to record as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2016			2017			2017			2018
Net cash provided by operating activities	$	35,842		$	45,026		$	14,765		$	22,031
Net cash used in investing activities		(46,903	)		(32,354	)		(13,461	)		(9,277	)
Net cash provided by (used in) financing activities		614			(614	)		2,088			(4,540	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(10,447	)	$	12,058		$	3,392		$	8,214

Cash Flows from Operating Activities

Our largest source of operating cash is cash collections from our customers for subscriptions to our products. Our primary uses of cash in operating activities are for employee-related expenditures, marketing

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expenses and third-party hosting costs. Historically, we have generated positive cash flows from operating activities. Net cash provided by operating activities is impacted by our net loss adjusted for certain non-cash items, including depreciation and amortization expenses, stock-based compensation, derecognition of goodwill and intangible assets, deferred income taxes, as well as the effect of changes in operating assets and liabilities.

During the six months ended June 30, 2018, cash provided by operating activities was $22.0 million, primarily due to our net loss of $27.2 million, adjusted for non-cash charges of $40.9 million and net cash inflows of $8.3 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of property and equipment and intangible assets and stock-based compensation. The primary drivers of the changes in operating assets and liabilities related to a $14.5 million increase in deferred revenue and a $2.6 million increase in accounts payable and accrued liabilities, partially offset by a $3.6 million decrease in accrued compensation and a $3.8 million decrease in prepaid expenses and other assets. Additionally, the change in operating assets and liabilities was due to a decrease of $0.7 million in accounts receivable and accrued interest on financing lease obligation.

During the six months ended June 30, 2017, cash provided by operating activities was $14.8 million, primarily due to our net loss of $19.1 million, adjusted for non-cash charges of $33.8 million and changes in our operating assets and liabilities of $21,000. Non-cash charges primarily consisted of depreciation and amortization of property and equipment and intangible assets, stock-based compensation, and deferred income taxes. The primary drivers of the changes in operating assets and liabilities related to a $6.0 million increase in deferred revenue and an increase in accrued interest on financing lease obligation of $3.2 million, partially offset by a $4.0 million decrease in accrued compensation and a $5.5 million decrease in accounts payable and accrued liabilities.

During 2017, cash provided by operating activities was $45.0 million, primarily due to our net loss of $24.0 million, adjusted for non-cash charges of $54.0 million and net cash inflows of $15.0 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of property and equipment and intangible assets, stock-based compensation and deferred income taxes. The primary drivers of the changes in operating assets and liabilities related to an $8.6 million increase in deferred revenue, as well as increases in accrued interest on financing lease obligation of $4.6 million and in accrued compensation of $2.3 million, partially offset by a $2.1 million decrease in accounts payable and accrued liabilities. Additionally, the change in operating assets and liabilities was due to an increase of $1.5 million in accounts receivable and prepaid expenses and other assets.

During 2016, cash provided by operating activities was $35.8 million, primarily due to our net loss of $76.4 million, adjusted for non-cash charges of $94.7 million and net cash inflows of $17.5 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of property and equipment and intangible assets, stock-based compensation, impairment of goodwill and intangible assets, deferred income tax and amortization of debt discount and issuance costs. The primary drivers of the changes in operating assets and liabilities related to an $8.7 million increase in accounts payable and accrued liabilities, a $6.9 million increase in accrued interest on financing lease obligation and a $4.6 million increase in deferred revenue, partially offset by a $3.5 million decrease in prepaid expenses and other assets. Additionally, the change in operating assets and liabilities was due to an increase of $0.8 million in accrued compensation.

Cash Flows from Investing Activities

Our primary investing activities have consisted of capital expenditures to purchase equipment necessary to support our data center facilities and our network and other operations and capitalization of internal-use software necessary to deliver significant new features and functionality in our survey platform which provides value to our customers. As our business grows, we expect our capital expenditures to continue to increase.

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Net cash used in investing activities during the six months ended June 30, 2018 of $9.3 million was primarily attributable to purchases of property and equipment of $4.8 million to support additional office space and headcount, and the capitalization of internal-use software costs of $5.5 million associated with the development of additional features and functionality of our platform, which was partially offset by proceeds from the sales of investment in privately held companies and other property of $1.0 million.

Net cash used in investing activities during the six months ended June 30, 2017 of $13.5 million was primarily attributable to purchases of property and equipment of $19.4 million to support additional office space and headcount, and the capitalization of internal-use software costs of $8.5 million associated with the development of additional features and functionality of our platform, which was partially offset by proceeds from the sales of an investment in a privately held company and other property of $14.5 million.

Net cash used in investing activities during 2017 of $32.4 million was primarily attributable to purchases of property and equipment of $32.5 million to support additional office space and headcount, and the capitalization of internal-use software costs of $15.3 million associated with the development of additional features and functionality of our platform, which was partially offset by proceeds from the sales of investment in privately held companies and other property of $15.5 million.

Net cash used in investing activities during 2016 of $46.9 million was primarily attributable to purchases of property and equipment of $30.4 million to support additional office space and headcount, and the capitalization of internal-use software costs of $15.8 million associated with the development of additional features and functionality of our platform.

Cash Flows from Financing Activities

Cash used in financing activities during the six months ended June 30, 2018 of $4.5 million was primarily due to cash paid of $3.2 million for the satisfaction of tax withholding obligations for the release of RSUs and principal payments on our credit facilities of $1.5 million.

Cash provided by financing activities during the six months ended June 30, 2017 of $2.1 million was primarily due to cash received of $6.4 million for tenant improvement reimbursements under our financing lease, partially offset by cash paid of $3.9 million for the satisfaction of tax withholding obligations for the release of RSUs and net cash paid of $0.5 million related to the refinancing of our credit facilities.

Cash used in financing activities in 2017 of $0.6 million was primarily the result of cash paid of $6.9 million for the satisfaction of tax withholding obligations for the release of RSUs, net cash paid of $2.1 million related to the refinancing of our credit facilities, partially offset by cash proceeds of $8.4 million for tenant improvement reimbursements under our financing lease.

Cash provided by financing activities in 2016 of $0.6 million was primarily due to cash proceeds of $21.9 million net of repayments related to the refinancing of our credit facilities, $5.5 million of tenant improvement reimbursements under our financing lease and $0.2 million from stock option exercises, partially offset by cash paid of $11.9 million for the satisfaction of certain tax withholding obligations for the release of RSUs and $15.1 million related to our acquisition of TechValidate (as such consideration was contingent and payment was not made soon after the acquisition date).

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Contractual Obligations

Our principal commitments consist of obligations under our credit facilities leases for office space. As of June 30, 2018, the future non-cancelable minimum payments under these commitments were as follows:

	Payments Due by Period
(in thousands)	Total		Remainder of 2018		2019		2020		2021			2022	2023	Thereafter
Credit facilities(1)	$	322,000	$	1,500	$	3,000	$	3,000	$	3,000	&