Smartsheets Q3 Update: SMAR

I updated Saul’s Original June post with the 3rd Quarter 2018 results reported on Dec 3. Looks good to me. Net retention rate is at 132% and has been increasing the last couple quarters, revenue growth maintained 59% last quarter, operating cash flow turned positive last quarter, seems to have a large TAM, and is still a small market cap with a long runway for growth. Use this info at your own discretion. - 2020investor

Apr 2018 – IPO at $15.

June 2018 – Caps4growth brought it to the board. Here are his lightly edited observations:

It offers Smartdashboards that provide the status of work to align individuals, managers, and executives. It has subscription revenue growth of nearly 60% and billings growth of about 50%. It has 80% gross margins, and grew revenues 66% last year and guides to 44% growth this year and 35-40% each of the two years thereafter. It has over 3.6 million users with 90% of the Fortune 100 using its product (Saul: I suspect this means that at least some tiny percent of each company has a seat) and a 130% dollar retention rate (now that’s more impressive). Its cloud-based collaboration platform makes it easier for businesses to plan, track and automate work at scale. Market cap of $2.7 billion. I did not find TAM. It might be a little pricy but looks like a long runway.

December 2018 – Oct quarter results

• EPS of minus 9 cents
• Total revenue up 59% to $46.9 million.
• Last 7 quarters of revenue growth: 59%, 59%, 63%, 69%, 65%, 68%, 63%

• GAAP operating loss was $16.4 million,
• Op cash flow was positive $2.4 million,
• Free cash flow was negative $2.0 million

• Subscription revenue was $41.5 million, up 57% YOY.
• Prof services revenue was $5.3 million, up 81%

• Adj operating loss was $9.4 million, or 32% of revenue

• Adj net loss was $9.4 million
• Adj net loss per share was 9 cents
• Op cash flow was positive $8.2 million
• Free cash flow was minus $2.0 million

• Domain-based customers 77,893
• New Domain-based customers 1,500
• Customers with annualized contract values (ACV) of $50,000 or more up 148% to 360
• Domain Customers Average annualized contract values was ACV up 48% to $2,214,

• Dollar-based net retention rate was 132%. And the last seven quarters have been 132%, 131%, 124%, 126%, 129%, 130%, 130%!

Guidance for quarter:
• Total revenue of $49.5 million for growth of 50.5%
• Adj operating loss of $15 million
• Adj net loss per share of 14 cents, assuming 103 million shares

Guidance for fiscal year
• Total revenue of $ $174.6 million for growth of 57.5%
• Adj operating loss of $45 million
• Adj net loss per share of 43 cents, assuming 99.5 million shares
• Billings of $211 million representing growth of 55.5%
• Net free cash flow of negative $20 million

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