According to a Research and Markets report, the global enterprise collaboration software market is estimated to grow at a CAGR of 11% from $31.7 billion in 2018 to $53.8 billion by 2023. Smartsheet (Nasdaq: SMAR), a leading player in the market recently announced its quarterly results that surpassed market expectations and sent the stock soaring to life high levels.
For the fourth quarter of the year, Smartsheet’s revenues grew 58% over the year to $52.2 million, ahead of the market’s forecast of $50 million. It ended the quarter with a non-GAAP loss of $0.07 per share, which was significantly better than the Street’s estimated loss of $0.14 per share.
By segment, subscription revenues grew 56% to $46.5 million and professional services revenues grew 77% to $5.7 million.
Among key operating metrics, it ended the quarter with over 4.8 million users, including more than 800,000 paid licensed users and 79,000 domain users. Its billing grew 63% to $64.1 million for the quarter.
Smartsheet ended the year with revenues growing 60% to $177.7 million and a net loss of $53.9 million, or 65 cents per share.
For the current quarter, it expects revenues of $54-$55 million with non-GAAP net loss per share of $0.19-$0.18. Analysts had forecast revenues of $52.6 million for the quarter with a loss of $0.14 per share. Smartsheet expects to end the fiscal with revenues of $253-$257 million with a non-GAAP net loss per share of $0.59-$0.55. The Street had forecast revenues of $254 million for the year with a loss of $0.56 per share.
Smartsheet’s Accelerator Focus
For the coming year, Smartsheet is focusing on its Accelerator offering. Smartsheet’s Accelerators are a portfolio of solutions that have been designed to help businesses to deploy large-scale initiatives with enterprise-grade security and administration at accelerated speed. These solution focused offerings are helping Smartsheet make bigger inroads into the enterprise segment.
Currently, Smartsheet offers Accelerators for IT Project Management Offices (PMO), Professional Services, and Mergers and Acquisitions (M&A). The PMO Accelerator provides real-time portfolio visibility into budget versus actual metrics in a simple and transparent manner. Its Professional Services Accelerator allows companies to manage client onboarding operating practices with standardized plans, client facing reports and dashboards, and includes integrations with CRM systems like Salesforce. Finally, its M&A Accelerator enables organizations to accelerate deal closure and optimize integration processes by providing an operational framework based on best practices for managing acquisition targets, due diligence activities, integration planning, and delivery across multiple workstreams. Smartsheet plans to continue to build on these focused offerings by adding additional solution areas including construction, corporate governance, and marketing.
Smartsheet has built a successful platform for enterprise collaboration. For its developer community, Smartsheet offers Software Development Kits that provide a higher level interface for several languages. It allows developers to build apps, integrators, and connectors that power collaboration capabilities by automatically synchronizing data in critical business platforms with Smartsheet. These apps allow organizations with access to capabilities ranging from time sheet tracking, project accounting, and even identity and access management. I would like to know from Smartsheet about the kind of apps that it sees most traction from? What are the kind of apps that it thinks developers should focus most on to help continue to build on its PaaS strategy?
Till last year, Smartsheet was venture funded and had 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 last year, Smartsheet went public by raising $150 million at a list price of $15 a share and a valuation of $1.48 billion. Currently, it is trading at $41.55 with a market capitalization of $4.3 billion. It climbed to a high of $46.14 earlier this month and has been steadily climbing from the 52-week low of $18.66 that it was trading at nearly a year ago.