According to a Markets and Markets report, the global enterprise collaboration market is expected to grow 9% over the year to $48.1 billion by 2024 from $31 billion in 2019. Last month, Seattle-based Smartsheet (Nasdaq: SMAR) announced its third quarter results that surpassed market expectations.
For the third quarter, Smartsheet’s revenues grew 53% over the year to $71.5 million, ahead of the market’s forecast of $69.7 million. It ended the quarter with an adjusted net loss of $0.15 per share, which was better than the Street’s forecast of a loss of $0.18 per share.
By segment, Subscription revenues grew 55% to $64.4 million, and Professional services revenue grew 34% to $7.2 million.
Among operating metrics, Smartsheet ended the quarter with 83,139 domain-based customers. The number of customers with annualized contract values (ACV) of $5,000 or more grew 15% to 8,421. The number of customers with ACV of $50,000 or more grew 114% to 770 and the number of customers with ACV of $100,000 or more grew 120% to 279. Average ACV per domain-based customer grew 48% to $3,286.
For the current quarter, Smartsheet expects revenues of $77-$78 million with non-GAAP net loss per share of $0.17-$0.16. It expects to end the year with revenues of $269.4-$270.4 million with a non-GAAP net loss per share of $0.53-$0.52. Analysts were looking for revenues of $76.54 million for the quarter with a loss of $0.16 per share and revenues of $267.22 million for the year with a loss of $0.55 per share.
Smartsheet’s Marketing Expansion
Smartsheet, which is among out Top 20 Cloud stock for 2020, has built a successful platform for enterprise collaboration that includes several useful capabilities.
During the quarter, Smartsheet expanded its platform capabilities for the marketing and creative content space. It announced the availability of its extension in private beta for Adobe Creative Cloud. The extension will help teams to implement more agile and effective content processes across marketing and creative use cases. It will seamlessly bring content creation and review processes into Adobe Creative Cloud, thus eliminating silos so that customers can all manage workflows in one application. Users will be able to view and collaborate on work items, upload content, and request feedback while remaining in Adobe applications. Smartsheet is expanding these extensions to be available for Adobe Photoshop, Illustrator, and InDesign.
Besides the integration with Adobe, Smartsheet also released several new offerings for marketing teams to help them solve critical marketing and creative development workflows. Accelerator for Marketing Shared Services is one such product that will help customers manage high volume, complex service requests from across their entire organization. Accelerator for Events will integrate event planning best practices with Smartsheet’s collaboration features so that teams can manage planning, scheduling, execution, lead collection, and processing for events. Accelerator for Campaign Management integrates planning with execution and analytics for campaigns. Teams can get real-time visibility into campaign status across departments and functions.
Its stock is currently trading at $45.26 with a market capitalization of $5.4 billion. It climbed to a 52-week high of $55.79 in July last year. It hit a 52-week low of $27 nearly a year ago. Smartsheet had listed in 2018 at $15 a share at a valuation of $1.5 billion. Prior to that, it was privately held and had raised $113.2 million from investors including Jenny Ceran, Sutter Hill Ventures, Insight Venture Partners, and Madrona Venture Group.