Hot stock to watch: Smartsheet Inc (NYSE: SMAR)

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Smartsheet Inc (NYSE: SMAR) stock rose 14.20% on March 17th, 2020 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19. The company has reported a fourth-quarter loss of $28.2 million, compared to a loss of $11.7 million in the year-ago period. Calculated billings rose 58% YoY to $101.5 million. Smartsheet had ended the year with more than 6.3 million total users, including more than 950,000 paid licensed users. More than 9,000 domain-based customers pay the company $5,000 or more per year, now representing over 75% of our ARR. In Q4, the dollar net retention rate rose to 135%. During the quarter, expansion within the base included 93 companies increasing their ARR by more than $50,000, up from 69 in Q3 and 28 companies increasing their ARR by more than $100,000, up from 17 in Q3. The company has generated negative operating cash flow of $42,000 and negative free cash flow of $3.6 million and the company has ended the fourth quarter with a strong cash and short-term investments position of $566 million.

SMAR in the fourth quarter of FY 19 has reported the adjusted loss per share of 13 cents, beating the analysts’ estimates for the adjusted loss per share of 16 cents, according to analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 51 percent to $78.5 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $77.7 million. The subscription revenue was $71.1 million, which is a 53% increase versus a year ago. Services revenue came in at $7.5 million, which is up 31% versus a year ago and represented 9% of total revenue. overall gross margin was 82%, stable with prior quarters while the  Subscription gross margin was 88% and professional services margin was 25%.

Smartsheet expects a loss to be in the range of 21 cents to 19 cents a share on revenue expected to be in the range of $82 million to $83 million for the first quarter. The company expects a loss to be in the range of 62 cents to 55 cents a share on revenue expected to be in the range of $373 million to $378 million for the year. Analysts had projected a loss of 15 cents a share on revenue of $81.6 million for the first quarter, and a loss of 53 cents a share on revenue of $372.4 million for the year.

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