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.

It offered a high-level project and resource management tool that has been designed to capture rich data across teams, projects, and the organization to enable leaders to get clarity about complex business challenges. It had a simple, intuitive design that minimizes operational noise and provides more accurate data in real-time so that teams can focus on their projects. Its clients include big names like Accenture, Stanford University, and Mercedes-Benz.

10,000ft was privately held. Its annual revenue is estimated by Owler to be $3 million. Smartsheet acquired 10,000ft for an estimated $27.5 million with the intention of adding real-time capacity planning, resource management and reporting capabilities to its existing offerings.

This is Smartsheet’s third acquisition so far, and second within the year. Smartsheet appears to be focusing on acquiring bootstrapped, smaller companies, to add to its portfolio. Earlier this year, it had acquired another Seattle-based company called TernPro for its video collaboration platform, Slope. I like DocuSign’s strategy of adding smaller acquisitions to its portfolio to access larger TAM and expand capabilities in its product scope.

Smartsheet’s Offerings

Besides growing through acquisitions, Smartsheet is also evolving newer products. Earlier this week, it announced the general availability of Smartsheet Gov, a secure solution for government organizations. Built on the AWS GovCloud, Smartsheet Gov enables federal agencies to organize and scale processes, streamline workflows, and automate tasks by increasing collaboration across departments. In April this year, Smartsheet had received the FedRAMP “In Process” certification. Its Government focused offering had been in beta stage since February. With the certification, the offering is now available for purchase. Smartsheet is focusing on getting the final certification so that it can expand its reach within the Government sector.

Till nearly a year ago, Smartsheet was privately held, having raised $113.2 million from investors including Jenny Ceran, Sutter Hill Ventures, Insight Venture Partners, and Madrona Venture Group. Its last private funding round was held in May 2017 when it was valued at $852 million. In April 2018, it raised $150 million by listing at a price of $15 a share and a valuation of $1.48 billion.

Currently, its stock is trading at $44.31 with a market capitalization of $4.7 billion. It hit a 52-week high of $49.04 earlier this month. It hit a 52-week low of $20.34 in July last year.

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