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Smartsheet (SMAR) Q2 Earnings Beat Estimates, Revenues Up Y/Y

Smartsheet SMAR reported first-quarter fiscal 2022 non-GAAP loss of 5 cents per share, narrower than the Zacks Consensus Estimate of a loss of 13 cents, as well as the year-ago quarter’s loss of 6 cents.

Revenues surged 44% year over year to $131.7 million and surpassed the Zacks Consensus Estimate by 5.1%.

Subscription revenues (92% of total revenues) increased 45% year over year to $121.1 million. Professional services (8% of total revenues) revenues rose 39.8% year over year to $10.6 million.

Calculated billings in the reported quarter jumped 47% year over year to $142.9 million. Quarterly, semi-annual and multi-year billings represented about 3% of total billings reported in the quarter.

User Base Increased Y/Y

Smartsheet ended the reported quarter with more than 9 million users and annual recurring revenues (ARR) growing 10% sequentially to over $0.5 billion.

Smartsheet Inc. Price, Consensus and EPS Surprise

Smartsheet Inc. price-consensus-eps-surprise-chart | Smartsheet Inc. Quote


143 companies increased their ARR by more than $50,000. Of these, 49 companies increased ARR by more than $100,000.Smartsheet now has 22 customers with ARR more than $1 million compared to 15 in the last quarter.

In the quarter under review, the number of customers with annualized contract value ("ACV") of $5,000 or higher increased 34% year over year to 13,420.

The number of customers with ACV of $50,000 or higher surged 64% year over year to 1,856. The number of customers with ACV of $100,000 or higher soared 73% year over year to 748.

Smartsheet’s net dollar retention rate was 128% in the reported quarter. The company’s average ACV per domain-based customer increased 42% year over year to $5,915.

Smartsheet is benefiting from its expanding footprint into different industries  with largest industry now accounting for only 12% of its ARR. Smartsheet’s expanding technology customer base that includes the likes of Zoom ZM, Hitachi, Intuit INTU and PayPal PYPL has been a key catalyst.

Operating Details

Gross margin on a non-GAAP basis stayed at 82% on a year-over-year basis. Subscription gross margin was 87%, unchanged year over year. Professional services margin was 23%, which contracted 100 bps year over year.

Total operating expenses surged 49.4% year over year to $147.8 million.

Non-GAAP operating loss was $5.2 million, narrower than the year-ago quarter’s loss of $7.4 million.

Balance Sheet & Cash Flow

As of Jul 31, 2021, Smartsheet’s cash & cash equivalents were $442.8 million.

Net free cash flow was $3.5 million compared with net free cash outflow of $4.4 million in the previous quarter.


For the third quarter of fiscal 2021, Smartsheet expects revenues between $138 million and $139 million. This indicates growth of 39-40% from the year-ago quarter’s reported figure.

This Zacks Rank #3 (Hold) company expects calculated billings between $149 million and $150 million, indicating year-over-year growth of 33-34%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Non-GAAP operating loss is expected between $12 million and $15 million while non-GAAP net loss is anticipated to be 10-12 cents per share.

For fiscal 2022, Smartsheet anticipates revenues between $530 million and $533 million, which indicates growth of 37-38% from the prior fiscal year.

Calculated billings for the current fiscal year are expected between $619 million and $622 million.

The company now expects a non-GAAP operating loss of $45-$55 million.

Non-GAAP net loss is anticipated between 36 cents and 44 cents per share.

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