Why Smartsheet’s Q2 Was So Strong
Smartsheet released better-than-expected fiscal second-quarter financial results after the markets closed on Tuesday.
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When Smartsheet Inc. (NYSE: SMAR) released its fiscal second-quarter financial results after the markets closed on Tuesday, the company said that it had a net loss of $0.08 per share on $42.4 million in revenue. Consensus estimates had a called for a net loss of $0.14 per share and $39.1 million in revenue.
During the quarter, Subscription revenue was $37.5 million, an increase of 57% year over year, and Professional services revenue was $4.9 million, an increase of 71%.
The company ended the quarter with 76,693 domain-based customers, with the average annualized contract value (ACV) increasing 49% year over year to $2,002. The number of all customers with ACV of $50,000 or more grew to 298, an increase of 146%.
Looking ahead to the fiscal third quarter, the company expects to see a net loss in the range of $0.16 to $0.15 and total revenue between $43.5 million and $44.5 million. Consensus estimates call for a net loss of $0.17 per share and $41.21 million in revenue for the quarter.
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Mark Mader, CEO of Smartsheet, commented:
Q2 was a strong quarter with revenue growing 59% year-over-year and net dollar retention rate reaching a record 131%. We continue to drive better business outcomes for our customers by empowering everyone to improve the way they work, connect, innovate, and execute.
Shares of Smartsheet closed Tuesday at $31.70, with a consensus analyst price target of $31.00 and a post-IPO range of $18.06 to $32.79. Following the announcement, the stock was up 11% at $35.25 in early trading indications Wednesday.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
