Smartsheet Inc (NYSE:SMAR) Posts Weak Earnings Outlook

Smartsheet Inc (NYSE:SMAR) stock fell 7.22% (As on June 8, 12:39:45 AM UTC-4, Source: Google Finance) after the company reported a lower-than-expected earnings outlook. Subscription revenue in the quarter came in at $155.3 million and professional services revenue at $13 million, both up 44% year-over-year. Net operating cash flow was a negative $5.1 million, compared with $3 million in the first quarter of fiscal 2022. Smartsheet’s dollar-based net retention rate was 133%, meaning it’s squeezing more revenue from existing customers, and the number of customers with annualized contract values of $100,000 or more jumped 68%, to 1,108. Non-GAAP operating loss was $23.1 million, or 14% of total revenue, compared to non-GAAP operating loss of $12.0 million, or 10% of total revenue, in the first quarter of fiscal 2022. Non-GAAP net loss was $23.7 million, compared to non-GAAP net loss of $10.7 million in the first quarter of fiscal 2022. Net operating cash flow was negative $5.1 million, compared to net operating cash flow of negative $3.0 million in the first quarter of fiscal 2022. Net free cash flow was negative $9.1 million, compared to net free cash flow of negative $8.2 million in the first quarter of fiscal 2022.

SMAR in the first quarter of FY 23 has reported the adjusted loss per share of 18 cents, beating the analysts’ estimates for the adjusted loss per share of 19 cents. The company had reported the adjusted revenue growth of 44 percent to $168.3 million in the first quarter of FY 23, beating the analysts’ estimates for revenue of $162.5 million. Dollar-based net retention rate was 133%. Calculated billings were $180.1 million, representing year-over-year growth of 36%. The number of all customers with annualized contract values (“ACV”) of $100,000 or more grew to 1,108, an increase of 68% year over year. The number of all customers with ACV of $50,000 or more grew to 2,516, an increase of 50% year over year. The number of all customers with ACV of $5,000 or more grew to 15,879, an increase of 25% year over year

For the second quarter of fiscal 2023, Smartsheet predicted an adjusted loss of 19 to 21 cents per share on revenue of $180 million to $181 million. Analysts expected an adjusted loss of 17 cents per share on revenue of $179.3 million.

For the full fiscal year 2023, the company predicts an adjusted loss of 59 to 67 cents per share on revenue of $756 million to $761 million.

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