Smartsheet Inc Achieves Strong Q2 Performance and Growth
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Smartsheet Inc Reports Strong Q2 Results
BELLEVUE, Wash. - Smartsheet Inc. (NYSE: SMAR) delivered impressive results for the second quarter, exceeding expectations and uplifting its annual revenue guidance. The achievement is a testament to its robust enterprise growth and improved profitability.
Positive Market Response
Following the announcement, Smartsheet shares showed minor fluctuations in after-hours trading, staying steady after a notable 4.3% increase on Thursday. This uptick was prompted by a Reuters report indicating growing interest from private equity firms in the company.
Quarterly Performance Highlights
The enterprise work management platform reported adjusted earnings per share of $0.44, significantly higher than the analyst average of $0.29. Smartsheet’s revenue for the quarter reached $276.4 million, showcasing a 17% year-over-year growth and slightly exceeding the consensus estimate of $274.29 million. CEO Mark Mader emphasized the company's surge in enterprise demand, mentioning that over 70 customers have increased their Smartsheet annual recurring revenue by more than $100,000 this quarter.
Annualized Recurring Revenue Growth
The company also noted a 17% year-over-year growth in its annualized recurring revenue (ARR), amounting to $1.093 billion, while the average ARR per domain-based customer rose by 16% YoY to $10,291. Furthermore, Smartsheet reported an impressive dollar-based net retention rate of 113%.
Optimistic Future Projections
Looking ahead to the third quarter, Smartsheet anticipates revenue within the range of $282 million to $285 million, which corresponds to an expected growth of 15% to 16% year-over-year. The company has raised its full-year revenue forecast to an impressive $1.116 billion to $1.121 billion, a notable increase from its earlier projections.
Profitability and Cash Flow
Smartsheet’s enhanced profitability is illustrated through a record free cash flow of $57.2 million, accounting for 21% of total revenues. The company concluded the quarter with a strong balance sheet, including $706.6 million in cash, cash equivalents, and short-term investments.
Frequently Asked Questions
What were the key financial metrics for Smartsheet in Q2?
Smartsheet recorded adjusted EPS of $0.44, and revenue of $276.4 million, up 17% YoY.
How has Smartsheet's ARR changed?
The company's ARR grew by 17% year-over-year, reaching $1.093 billion.
What is the dollar-based net retention rate for Smartsheet?
Smartsheet reported a dollar-based net retention rate of 113% for the quarter.
What are the future revenue projections for Smartsheet?
Smartsheet expects Q3 revenue between $282 million and $285 million and has raised its annual revenue outlook to $1.116 billion to $1.121 billion.
How much free cash flow did Smartsheet generate?
Smartsheet achieved a free cash flow of $57.2 million, representing 21% of its total revenue.
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