Smartsheet Banks On Acquisitions For Growth

The global enterprise collaboration software market is estimated to grow 11% annually to $53.8 billion by 2023. Seattle-based Smartsheet (NYSE: SMAR) is already benefiting from this double-digit growth rate. Growth in revenues doesn’t appear to be translating into profits, but the market does not seem very concerned. Smartsheet continues to add capabilities through product innovation and acquisitions.

Smartsheet’s Financials

For the first quarter of the year, Smartsheet’s revenues grew 55% over the year to $56.2 million, ahead of the market’s forecast of $55 million. It ended the quarter with a non-GAAP loss of $0.12 per share, which was significantly better than the Street’s estimated loss of $0.18 per share.

By segment, Subscription revenues increased 57% to $50.3 million. Professional services revenues grew 38% to $5.9 million.

Among operating metrics, Smartsheet’s customers with annualized contract value (ACV) of $5,000 or higher grew 56% to 6,779. Customers with ACV of $50,000 or higher grew 117% to 518 and customers with ACV of $100,000 or higher grew 139% to 189. Its average ACV per domain-based customer grew 48% to $2,675.

For the current quarter, it expects revenues of $63-$64 million with non-GAAP net loss per share of $0.15-$0.16. It expects to end the year with revenues of $262-$265 million and a non-GAAP net loss per share of $0.54-$0.59. Analysts were looking for revenues of $61.06 million for the quarter with a loss of $0.13 per share and revenues of $255.28 million for the year with a loss of $0.57 per share.

Smartsheet’s Acquisitions

Last month, Smartsheet announced the acquisition of Seattle-based resource management startup Artefact Product Group. Founded in 2012, Artefact is more commonly known as 10,000ft for its SaaS platform that enables organizations to improve decision making and forecasting through real-time capacity planning, resource management, and reporting.

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