Smartsheet Tops Q2 Earnings Estimates, Raises FY24 Outlook

Smartsheet Inc SMAR reported Q2 FY24 revenue growth of 26% Y/Y to $235.6 million, beating the consensus of $229.51 million.

Subscription revenue rose 28% Y/Y to $221.5 million, and Professional services revenue increased 7% Y/Y to $14.1 million.

Billings stood at $243.1 million, up 18% Y/Y, and average annualized contract values (ACV) per domain-based customer rose 17% Y/Y to $8,863.

Mark Mader, CEO, said, "Our platform's scalability continues to drive strong demand from enterprises looking for solutions to manage their mission-critical work securely and consistently. We remain focused on delivering innovation around generative AI and other areas to help our customers achieve more and to extend our leadership position in the enterprise work management market."

Adjusted EPS of $0.16 exceeded the consensus of $0.07.

Operating cash flow stood at $48.5 million vs. $10.2 million a year ago, with free cash flow of $45.5 million in the quarter.

The company ended the quarter with $549.0 million in cash, equivalents, and short-term investments.

Outlook: Smartsheet expects Q3 revenue of $240 million-$242 million vs. street view of $241.24 million and adjusted EPS of $0.08-$0.09 vs. street view of $0.07.

The company boosted the outlook for FY24 revenue to $950 million - $953 million (from $943 million - $948 million) vs. street view of $945.8 million. Also, adjusted EPS was raised to $0.53-$0.57 from $0.37-$0.44 vs. consensus of $0.42.

Also Read: Despite Macro Challenges and Concerns over Second-Half Billings, Smartsheet Gains Analyst Confidence with Solid Free Cash Flow

Price Action: SMAR shares are trading higher by 6.10% at $42.82 premarket on the last check Friday.