According to Forrester and IDC, the total addressable market for collaborative applications and project/portfolio management is estimated to grow to more than $31.5 billion by 2021. Seattle-based Smartsheet (Nasdaq: SMAR) recently announced its second-quarter results that continued to outpace market expectations.
Smartsheet’s Financials
For the second quarter, Smartsheet’s revenues grew 53% to $64.6 million, ahead of the market’s forecast of $63.52 million. Net loss was $19.1 million, compared with a net loss of $12.3 million a year ago. Adjusted net loss was $0.08 per share, which was flat to last year’s loss and significantly better than the Street’s forecast of a loss of $0.16 per share.
By segment, Subscription revenues grew 56% to $58.3 million, and Professional services revenue grew 29% to $6.3 million.
Among operating metrics, Smartsheet ended the quarter with 82,186 domain-based customers. The number of all customers with annualized contract values (ACV) of $5,000 or more grew 55% to more than 7,670. The number of all customers with ACV of $50,000 grew 113% to 635 and the number of all customers with ACV of $100,000 or more grew 128% to just over 225. Average ACV per domain-based customer grew 48% to $2,972.
For the third quarter, Smartsheet expects revenues of $69-$70 million with a non-GAAP net loss per share of $0.19-$0.18. It expects to end the year with revenues of $265-$268 million with a non-GAAP net loss per share of $0.58-$0.54. Analysts were looking for revenues of $68.85 million for the quarter with a loss of $0.15 per share and revenues of $264.26 million for the year with a loss of $0.55 per share.
Smartsheet’s Product Expansion
During the quarter, Smartsheet continued to enhance its product portfolio. The latest enhancements include automated workflows that can now allow users to automate multiple actions and scenarios in a single workflow. The feature will allow users to automate approvals with multiple stakeholders or to create a recurring workflow using a time-based schedule.
Last month, Smartsheet released several other product enhancements that improve Directory integration for its customers. The service now allows customers with enterprise or premier plans to enable connect and synchronize their Azure Active Directory to Smartsheet. The feature will allow customers to add users into the right role, remove users from their organization’s Smartsheet account, and synchronize the user’s department, cost center, and other fields into their Smartsheet user profile.
Smartsheet is looking to expand its presence within the Government sector. Earlier this year, it started the process of gaining approvals and last month Smartsheet Gov received a full FedRAMP authorization. The FedRAMP status will allow it to expand its service among federal employees to drive their effectiveness. Smartsheet Gov has been built on AWA’s GovCloud and is a secure solution that helps federal agencies organize and scale processes, streamline workflows and automate critical tasks.
The Smartsheet platform stands out from competitors because of its rich feature set and ease of use. Its competitors in the enterprise collaboration market include Atlassian’s Trello, Asana, and Workfront to name a few.
Its stock is currently trading at $42.24 with a market capitalization of $4.87 billion. It climbed to a high of $55.79 in July last year. It hit a 52-week low of $20.34 in December last year.
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