Smartsheet's Engage Conference Reveals Future Growth Drivers: Analyst Weighs In On AI And Scalability

Needham analyst Scott Berg reiterated Smartsheet Inc SMAR with a Buy and a $57 price target.

The analyst attended Smartsheet's annual customer conference, Engage, yesterday, which saw turnout nearly double Y/Y to 4k. 

New AI functionality was a key theme, but the conference was highlighted by introducing new capabilities, with new product introductions focused on the scalability of the platform, ease of solution generation, updated views for projects, and themes for dashboards that meet several current customer needs. 

SMAR announced an updated and revamped template gallery that allows customers to select solutions that work for them efficiently. The company's recently released Solution Panel will also enable customers to more efficiently manage their work, allowing users to view all Workspace content while working on an individual item and easily switch between different Sheets, reports, folders, or dashboards in a Workspace.

 An update that was met with a round of applause was the new Themes capability for Dashboards, which allows users to toggle between many colored themes and formats and then apply their preferred theme to a Dashboard with a click. 

Many new views were announced for Sheets, with the Timeline view being the one users seemed most excited about.

For the People in Work-People-Content, SMAR announced two new functionalities for Resource Management: Workload Heatmap and Workload Schedule.

Powered by Smartsheets D.A.M, Content Library is now usable across Brandfolder and SmartSheet, bringing Brandfolder features and SmartSheet features together to form marketing campaigns.

As expected, a significant topic of discussion surrounded AI functionality announcements and demos, with the analyst coming away impressed by the functionality coming in the near term and overall pipeline.

Berg's customer conversations were positive regarding the pace of innovations and their differentiation for scalability to the largest or most complex needs. 

Customer enthusiasm for AI functionality was high, yet purchasing seemed to be tempered by data privacy concerns. The introduced new capabilities and AI support our view that ARPU growth will influence SMAR's next growth leg more than seat growth.

The analyst projects Q3 revenue of $241.09 million vs. consensus of $241.24 million and adjusted EPS of $0.08 in line with the consensus.

Price Action: SMAR shares traded higher by 0.92% at $41.89 on the last check Wednesday.