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Project management software maker Smartsheet (NYSE:SMAR)
reported Q2 FY2024 results topping analysts’ expectations, with revenue up 26.2% year on year to $235.6 million. The company also expects next quarter’s revenue to be around $241 million, slightly below analysts’ estimates. Turning to EPS, Smartsheet made a GAAP loss of $0.25 per share, improving from its loss of $0.48 per share in the same quarter last year.
Is now the time to buy Smartsheet? Find out by reading the original article on StockStory.
Smartsheet (SMAR) Q2 FY2024 Highlights:
Sales Growth
As you can see below, Smartsheet’s revenue growth has been very strong over the last two years, growing from $131.7 million in Q2 FY2022 to $235.6 million this quarter.
This quarter, Smartsheet’s quarterly revenue was once again up a very solid 26.2% year on year. On top of that, its revenue increased $15.7 million quarter on quarter, a very strong improvement from the $7.55 million increase in Q1 2024. This is a sign of acceleration of growth and great to see.
Next quarter’s guidance suggests that Smartsheet is expecting revenue to grow 20.8% year on year to $241 million, slowing down from the 38% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 19.7% over the next 12 months before the earnings results announcement.
Large Customers Growth
This quarter, Smartsheet reported 19,031 enterprise customers paying more than $5,000 annually, an increase of 548 from the previous quarter. That’s quite a bit more contract wins than last quarter but also quite a bit below what we’ve typically observed over the last year, suggesting that the company may be reinvigorating growth.
Key Takeaways from Smartsheet’s Q2 Results
Sporting a market capitalization of $5.44 billion, Smartsheet is among smaller companies, but its more than $549 million in cash on hand and positive free cash flow over the last 12 months puts it in an attractive position to invest in growth.
It was good to see Smartsheet beat analysts’ revenue expectations this quarter and the new large contract wins. On the other hand, its net revenue retention declined. Zooming out, we think this was still a decent quarter, showing that the company is staying on track. The stock is up 3.22% after reporting and currently trades at $41.65 per share.
The author has no position in any of the stocks mentioned in this report.
