Cloud Stocks: Should Zoom Acquire Smartsheet?

report published earlier this year expected the global team collaboration software market to grow at 13% CAGR from $9.5 billion in 2019. The current pandemic has further increased the adoption of enterprise collaboration solutions. Companies like Smartsheet (Nasdaq: SMAR) are benefitting from this growth.

Smartsheet’s Financials

For the quarter, Smartsheet’s Q3 revenues grew 38% to $98.9 million ahead of the market’s forecast by 4.7%. Net loss was $0.12 per share, which was significantly better than the market’s estimated loss of $0.22 per share.

By segment, Subscription revenues grew 41% to $90.9 million, and Professional services revenue grew 12% to $8 million.

Among operating metrics, customers with annualized contract value (ACV) of $5,000 or higher increased 33% to 11,172. Customers with ACV of $50,000 or higher grew 73% to 1,331 and customers with ACV of $100,000 or higher soared 81% to 504. Its net dollar retention rate was 125% in Q3 and average ACV per domain-based customer increased 42% to $4,665. Calculated Billings grew 22% to $98.93 million.

For the fourth quarter, Smartsheet expects revenues of $102-$103 million and non-GAAP net loss per share of $0.15-$0.13. The market was looking for revenues of $99.48 million with a loss of $0.13 per share. Smartsheet expects to end the year with revenues of $378-$379 million with a loss of $0.44-$0.42 per share. The market was looking for revenues of $370.61 million for the year with a net loss of $0.52 per share.

Smartsheet’s Product Upgrades

During the quarter, Smartsheet announced several product upgrades including a no-code platform WorkApps; an automation engine Bridge; and 10,000ft Panel for Smartsheet. WorkApps is a no-code platform enabling organizations to create custom desktop and mobile applications on the Smartsheet platform. The feature will allow organizations to build apps that can leverage forms, dashboards, reports, and data taken from Smartsheet and other external applications such as Tableau dashboards and Google Docs. It supports personalization around roles, allowing a single application to work across organizations with different data visibility and functionalities.

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