After a hiatus last year, several Billion Dollar Unicorn players finally appear to be listing on the public markets. Recently, enterprise collaboration software player Smartsheet (Nasdaq: SMAR) went public. The company appears to be growing at a steady clip, but margins remain distant.

Smartsheet’s Financials

Smartsheet was founded in 2005 with a vision to build an easy-to-use application for work management. It has taken inspiration in from from a simple spreadsheet. But when I spoke with its CEO, Mark Mader, a few years ago, he emphasized that the key difference between Smartsheet and spreadhseets from Microsoft and Alphabet is that Smartsheet is “a hybrid of multiple concepts”. Instead of using multiple solutions such as spreadsheets to track numbers, SharePoint to store files, and Access or Google Forms to capture information, Smartsheet does everything in one application. It allows users to collect unstructured data in a format that is easy to track and report. Smartsheet acts as a single source of truth across work processes and drives accountability and engagement within teams.

Smartsheet has become a leading cloud-based platform for work execution. As of January 2018, it had more than 92,000 customers globally. Its platform is used to collate and present information in customizable forms, track performance and status across activities, and utilize customized workflows to improve productivity.

It operates on a subscription-based model. Revenues for the year ended January 2018 grew 66% to $111.3 million. It ended the year with a net loss of $49.1 million, compared with a net loss of $15.2 million a year ago. During the same period, cash flow moved from a surplus of $0.1 million to a negative $13.6 million.

Smartsheet recently reported its first quarter results. Revenues grew 63% over the year to $36.3 million with subscription revenues growing 57% to $32.1 million and professional services revenues growing 129% to $4.3 million. Non-GAAP net loss came in at $11 million, compared with a net loss of $6.6 million a year ago.

For the current quarter, it expects revenues of $38.5-$39.5 million with non-GAAP net loss per share of $0.14-$0.13. It forecast revenues of $159-$162 million for the year with a non-GAAP net loss per share of $0.59-$0.56. Analysts expect the company to report revenues of $39.1 million for the quarter and a net loss of $0.13 per share. The Street forecast revenues of $160.5 million for the year with a net loss of $0.59 per share.

Smartsheet’s Expansion

Smartsheet recently announced the acquisition of a UK-based pioneer in the field of intelligent bots for business automation, Converse.AI, for an undisclosed sum. Converse.AI was founded in 2016 and it offers a workflow orchestration platform that allows business users to easily build and manage bots using a drag-and-drop interface. Its Chatflow solution enables workflow automation and data exchange between people and the bot. Smartsheet plans to leverage the acquisition to drive more automation to its own software. Currently, Smartsheet already integrates with third-party offerings, including Jira and Salesforce. Converse.AI’s acquisition will simplify further integration for other companies and their customers. Converse AI’s financial details prior to the acquisition are not widely known.

Till recently, Smartsheet had been venture funded. It had raised $113.2 million from investors including Jenny Ceran, Sutter Hill Ventures, Insight Venture Partners, and Madrona Venture Group. Its last funding round was held in May 2017 when it was valued at $852 million. Earlier this year, it raised $174 million by selling 11.6 million shares at $15 apiece It is currently trading at $27.11 with a market capitalization of $2.7 billion. It had climbed to $34.83 within a few weeks of listing. Its 52-week low is $27.75.

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