Smartsheet (SMAR) Tops Q1 EPS by 6c, Beats on Revenues; Offers FY19 EPS/Revenue Outlook Above Consensus

Smartsheet (NYSE: SMAR) reported Q1 EPS of ($0.12), $0.06 better than the analyst estimate of ($0.18). Revenue for the quarter came in at $36.3 million versus the consensus estimate of $33.16 million.

“We had a strong start to the year with revenue in the first quarter growing 63 percent year-over-year,” said Mark Mader, CEO of Smartsheet. “Our software empowers business users to deliver work at scale faster and with better visibility, and these capabilities continue to resonate with customers and prospects around the world."

“Our revenue growth was driven by healthy expansion rates from our existing customers, the addition of over 1,500 net new domain-based customers, and demand for consulting and training services,” said Jennifer Ceran, CFO of Smartsheet.

First Quarter Fiscal 2019 Financial Highlights

• Revenue: Total revenue was $36.3 million, an increase of 63% year-over-year. Subscription revenue was $32.1 million, an increase of 57% year-over-year. Professional services revenue was $4.3 million, an increase of 129% year-over-year.
• Operating Loss: GAAP operating loss was $13.0 million, or 36% of total revenue, compared to GAAP operating loss of $7.2 million, or 32% of total revenue, in the first quarter of fiscal 2018. Non-GAAP operating loss was $11.0 million, or 30% of total revenue, compared to non-GAAP operating loss of $6.7 million, or 30% of total revenue, in the first quarter of fiscal 2018. Our operating loss was impacted by incremental investments in the business and higher costs associated with operating as a public company.
• Net Loss: GAAP net loss was $14.3 million, compared to GAAP net loss of $7.2 million in the first quarter of fiscal 2018. GAAP net loss per share was $0.68, compared to GAAP net loss per share of $0.44 in the first quarter of fiscal 2018. Non-GAAP net loss was $11.0 million, compared to non-GAAPnet loss of $6.6 million in the first quarter of fiscal 2018. Non-GAAP net loss per share was $0.12, compared to non-GAAP net loss per share of $0.08 in the first quarter of fiscal 2018.
• Cash Flow: Net operating cash flow was negative $8.2 million, compared to net operating cash flow of negative $5.3 million in the first quarter of fiscal 2018. Net free cash flow was negative $9.7 million, compared to negative $7.8 million in the first quarter of fiscal 2018. Operating and free cash flows were impacted by approximately $4.2 million and $2.6 million related to our annual bonus payouts in the first quarter of fiscal 2019 and 2018, respectively.

Financial Outlook

For the second quarter of fiscal 2019, the Company currently expects:

• Total revenue of $38.5 million to $39.5 million representing year-over-year growth of 44% to 48%
• Non-GAAP operating loss of $14 million to $13 million
• Non-GAAP net loss per share of $0.14 to $0.13, assuming basic and diluted weighted average shares outstanding of approximately 102 million

For the full fiscal year 2019, the Company currently expects:

• Total revenue of $159 million to $162 million representing year-over-year growth of 43% to 46%
• Non-GAAP operating loss of $58 million to $54 million
• Non-GAAP net loss per share of $0.59 to $0.56, assuming basic and diluted weighted average shares outstanding of approximately 99 million
• Billings of $193 million to $196 million representing year-over-year growth of 42% to 44%
• Net free cash flow of up to negative $25 million

GUIDANCE:

Smartsheet sees FY2019 EPS of ($0.59)-($0.56), versus the consensus of ($0.61). Smartsheet sees FY2019 revenue of $159-162 million, versus the consensus of $155 million.

For earnings history and earnings-related data on Smartsheet (SMAR) click here.

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