Company Announcements

Smartsheet Inc. Announces Third Quarter Fiscal Year 2023 Results

  • Third quarter calculated billings grew 36% year over year to $219.6 million
  • Third quarter total revenue grew 38% year over year to $199.6 million
  • Third quarter non-GAAP operating loss was $4.3 million, or negative 2% of total revenue
  • Third quarter free cash flow was negative $4.6 million

 

BELLEVUE, Wash.--(BUSINESS WIRE)--Dec. 1, 2022-- Smartsheet Inc. (NYSE: SMAR), the enterprise platform for modern work management, today announced financial results for its third fiscal quarter ended October 31, 2022.

“Our global team delivered another strong quarter, exceeding expectations on both the top and bottom lines and releasing a host of platform innovations at our annual ENGAGE conference,” said Mark Mader, President and CEO of Smartsheet. “In the current challenging macro environment, customers are turning to Smartsheet to help execute more strategically and efficiently, and are realizing a rapid return on investment. Looking ahead, I am confident in our ability to continue to unlock significant value for our customers, and generate durable, long-term growth with improving profitability.”

Third Quarter Fiscal 2023 Financial Highlights

  • Revenue: Total revenue was $199.6 million, an increase of 38% year over year. Subscription revenue was $186.1 million, an increase of 40% year over year. Professional services revenue was $13.5 million, an increase of 12% year over year.
  • Operating Loss: GAAP operating loss was $42.6 million, or negative 21% of total revenue, compared to GAAP operating loss of $36.0 million, or negative 25% of total revenue, in the third quarter of fiscal 2022. Non-GAAP operating loss was $4.3 million, or negative 2% of total revenue, compared to non-GAAP operating loss of $2.7 million, or negative 2% of total revenue, in the third quarter of fiscal 2022.
  • Net Loss: GAAP net loss was $40.1 million, compared to GAAP net loss of $36.7 million in the third quarter of fiscal 2022. GAAP net loss per share was $0.31, compared to GAAP net loss per share of $0.29 in the third quarter of fiscal 2022. Non-GAAP net loss was $1.9 million, compared to non-GAAP net loss of $3.4 million in the third quarter of fiscal 2022. Non-GAAP net loss per share was $0.01, compared to non-GAAP net loss per share of $0.03 in the third quarter of fiscal 2022.
  • Cash Flow: Netoperating cash flow was negative $1.8 million, compared to net operating cash flow of negative $2.2 million in the third quarter of fiscal 2022. Free cash flow was negative $4.6 million, compared to free cash flow of negative $6.3 million in the third quarter of fiscal 2022.

Third Quarter Fiscal 2023 Business Highlights

  • Calculated billings were $219.6 million, representing year-over-year growth of 36%
  • Dollar-based net retention rate was 129%
  • The number of all customers with annualized contract values ("ACV") of $100,000 or more grew to 1,346, an increase of 55% year over year
  • The number of all customers with ACV of $50,000 or more grew to 2,962, an increase of 43% year over year
  • The number of all customers with ACV of $5,000 or more grew to 17,446, an increase of 23% year over year
  • Average ACV per domain-based customer increased to $7,951, an increase of 25% year over year
  • Completed Smartsheet's acquisition of Outfit, a brand management, templating and creative automation platform, and integrated Outfit's capabilities into Brandfolder, enhancing its digital asset management platform with powerful automation
  • Released Portfolio WorkApps, which combines the power of Control Center with the simplicity of WorkApps to streamline project and portfolio management
  • Introduced Capacity View, a new interactive resource planning view in Resource Management by Smartsheet, that enables customers to visualize the real-time capacity of their teams so they can better plan, prioritize and staff future work
  • Hosted Smartsheet’s annual customer conference, ENGAGE, which brought together thousands of attendees in Seattle to preview the latest Smartsheet features, connect with other Smartsheet customers, and attend trainings that will help them unlock the full value of the platform
  • Brandfolder by Smartsheet was named the number one digital asset management platform in G2’s 2022 Fall Grid Report and has been a leader in the report for 19 consecutive quarters

The section titled "Use of Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures with a reconciliation between GAAP and non-GAAP information. The section titled "Definitions of Business Metrics" contains definitions of certain non-financial metrics provided within this earnings release.

Financial Outlook

For the fourth quarter of fiscal year 2023, the Company currently expects:

  • Total revenue of $205 million to $207 million, representing year-over-year growth of 30% to 32%
  • Non-GAAP operating loss of $2 million to $0
  • Non-GAAP net loss per share of $0.02 to $0.00, assuming basic and diluted weighted average shares outstanding of approximately 131.5 million

For the full fiscal year 2023, the Company currently expects:

  • Total revenue of $760 million to $762 million, representing year-over-year growth of 38%
  • Calculated billings of $878 million to $885 million, representing year-over-year growth of 33% to 34%
  • Non-GAAP operating loss of $45 million to $43 million
  • Non-GAAP net loss per share of $0.31 to $0.30, assuming basic and diluted weighted average shares outstanding of approximately 130 million
  • Free cash flow of $5 million

We have not reconciled free cash flow guidance to net cash from operating activities because we do not provide guidance on the reconciling items between net cash from operating activities and free cash flow, due to the uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items will have a significant impact on our free cash flow. Accordingly, a reconciliation of net cash from operating activities to free cash flow guidance is not available without unreasonable effort. We do not provide reconciliation of calculated billings guidance as its components are solely revenue and deferred revenue, and guidance for revenue is already provided.

Conference Call Information

Smartsheet will host a conference call and live webcast for analysts and investors at 4:30 p.m. ET (1:30 p.m. PT) on December 1, 2022. A live webcast and accompanying presentation can be accessed on the Investor Relations section of the Company's website at: https://investors.smartsheet.com. The conference call can also be accessed by dialing (888) 440-6385, or +1 (646) 960-0180 (outside of the US). The conference ID is 7672979. A replay of the call via webcast will be available at https://investors.smartsheet.com or by dialing (800) 770-2030 or +1 (647) 362-9199 (outside of the US). The dial-in replay will be available until the end of day on December 8, 2022. The webcast replay will be available for one year.

Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include, but are not limited to, statements about Smartsheet’s outlook for the fourth fiscal quarter and the full fiscal year ending January 31, 2023, and Smartsheet’s expectations regarding possible or assumed business strategies, potential growth and innovation opportunities, new products, and potential market opportunities.

Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “believe,” “continue,” “could,” “potential,” “remain,” “will,” “would,” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, risks and uncertainties related to: our ability to achieve future growth and sustain our growth rate; our ability to attract and retain customers and increase sales to our customers; our ability to develop and release new products and services and to scale our platform; our ability to increase adoption of our platform through our self-service model; our ability to maintain and grow our relationships with strategic partners; the highly competitive and rapidly evolving market in which we participate; our ability to identify targets for, execute on, or realize the benefits of, potential acquisitions; our international expansion strategies; and the impact of the COVID-19 pandemic. Further information on risks that could cause actual results to differ materially from forecasted results is included in our filings with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended October 31, 2022 to be filed with the SEC. Any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found in the accompanying financial statements included with this press release.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP financial metrics to assist investors in seeing our financial performance through the eyes of management, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

We define non-GAAP operating loss as GAAP operating loss excluding share-based compensation expense, amortization of acquisition-related intangible assets, one-time costs associated with mergers and acquisitions, lease restructuring costs, and litigation expenses and settlements related to matters that are outside the ordinary course of our business. We define non-GAAP net loss as GAAP net loss excluding non-recurring income tax adjustments associated with mergers and acquisitions and the same exclusions that are used to derive non-GAAP operating loss. There are a number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net loss, including that the non-GAAP measures exclude share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy.

We use the non-GAAP financial measure of free cash flow, which is defined as GAAP net cash flows from operating activities, reduced by cash used for purchases of property and equipment (inclusive of spend on internal-use software). We believe free cash flow is an important liquidity measure of the cash that is available, after capital expenditures and operational expenses, for investment in our business and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. There are a number of limitations related to the use of free cash flow as compared to net cash from operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

We define calculated billings as total revenue plus the change in deferred revenue in the period. Because we recognize subscription revenue ratably over the subscription term, calculated billings can be used to measure our subscription sales activity for a particular period, to compare subscription sales activity across particular periods, and as an indicator of future subscription revenue.

Definitions of Business Metrics

Average ACV per domain-based customer

We define average ACV per domain-based customer as total outstanding ACV for domain-based subscriptions as of the end of the reporting period divided by the number of domain-based customers as of the same date. We define domain-based customers as organizations with a unique email domain name.

Dollar-based net retention rate

We calculate dollar-based net retention rate as of a period end by starting with the ACV from the cohort of all customers as of the 12 months prior to such period end, or Prior Period ACV. We then calculate the ACV from these same customers as of the current period end, or Current Period ACV. Current Period ACV includes any upsells and is net of contraction or attrition over the trailing 12 months, but excludes subscription revenue from new customers in the current period. We then divide the total Current Period ACV by the total Prior Period ACV to arrive at the dollar-based net retention rate. Any ACV obtained through merger and acquisition transactions does not affect the dollar-based net retention rate until one year from the date on which the transaction closed.

About Smartsheet

Smartsheet (NYSE: SMAR) is the enterprise platform for modern work management. By aligning people and technology so organizations can move faster and drive innovation, Smartsheet enables its millions of users to achieve more. Visit www.smartsheet.com to learn more.

Disclosure of Material Information

Smartsheet announces material information to its investors using SEC filings, press releases, public conference calls, and on its investor relations page of the company’s website at https://investors.smartsheet.com.

SMARTSHEET INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

 

 

 

 

 

 

 

Subscription

$

186,070

 

 

$

132,597

 

 

$

514,879

 

 

$

361,720

 

Professional services

 

13,507

 

 

 

12,031

 

 

 

39,699

 

 

 

31,726

 

Total revenue

 

199,577

 

 

 

144,628

 

 

 

554,578

 

 

 

393,446

 

Cost of revenue

 

 

 

 

 

 

 

Subscription

 

29,294

 

 

 

18,253

 

 

 

82,154

 

 

 

55,155

 

Professional services

 

13,569

 

 

 

11,162

 

 

 

38,418

 

 

 

28,298

 

Total cost of revenue

 

42,863

 

 

 

29,415

 

 

 

120,572

 

 

 

83,453

 

Gross profit

 

156,714

 

 

 

115,213

 

 

 

434,006

 

 

 

309,993

 

Operating expenses

 

 

 

 

 

 

 

Research and development

 

50,526

 

 

 

41,151

 

 

 

156,829

 

 

 

116,704

 

Sales and marketing

 

120,116

 

 

 

83,114

 

 

 

359,522

 

 

 

231,613

 

General and administrative

 

28,629

 

 

 

26,928

 

 

 

94,873

 

 

 

79,567

 

Total operating expenses

 

199,271

 

 

 

151,193

 

 

 

611,224

 

 

 

427,884

 

Loss from operations

 

(42,557

)

 

 

(35,980

)

 

 

(177,218

)

 

 

(117,891

)

Interest income

 

2,344

 

 

 

12

 

 

 

4,013

 

 

 

35

 

Other income (expense), net

 

593

 

 

 

(651

)

 

 

1,389

 

 

 

112

 

Loss before income tax provision

 

(39,620

)

 

 

(36,619

)

 

 

(171,816

)

 

 

(117,744

)

Income tax provision

 

517

 

 

 

99

 

 

 

1,091

 

 

 

214

 

Net loss

$

(40,137

)

 

$

(36,718

)

 

$

(172,907

)

 

$

(117,958

)

Net loss per share, basic and diluted

$

(0.31

)

 

$

(0.29

)

 

$

(1.33

)

 

$

(0.94

)

Weighted-average shares outstanding used to compute net loss per share, basic and diluted

 

130,634

 

 

 

126,118

 

 

 

129,611

 

 

 

125,157

 

Share-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands, unaudited):

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cost of subscription revenue

$

2,517

 

$

1,629

 

$

7,977

 

$

4,726

Cost of professional services revenue

 

1,436

 

 

 

1,034

 

 

 

4,669

 

 

 

2,648

 

Research and development

 

13,317

 

 

 

10,095

 

 

 

44,906

 

 

 

28,426

 

Sales and marketing

 

14,068

 

 

 

9,595

 

 

 

45,520

 

 

 

28,566

 

General and administrative

 

6,732

 

 

 

5,707

 

 

 

24,386

 

 

 

16,186

 

Total share-based compensation expense

$

38,070

 

 

$

28,060

 

 

$

127,458

 

 

$

80,552

 

SMARTSHEET INC.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)

 

 

October 31, 2022

 

January 31, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

194,404

 

 

$

449,074

 

Short-term investments

 

240,320

 

 

 

 

Accounts receivable, net of allowances of $5,250 and $7,561, respectively

 

148,466

 

 

 

151,138

 

Prepaid expenses and other current assets

 

35,190

 

 

 

34,390

 

Total current assets

 

618,380

 

 

 

634,602

 

Restricted cash

 

181

 

 

 

17

 

Deferred commissions

 

110,038

 

 

 

91,312

 

Property and equipment, net

 

39,409

 

 

 

36,835

 

Operating lease right-of-use assets

 

61,233

 

 

 

67,171

 

Intangible assets, net

 

41,360

 

 

 

44,096

 

Goodwill

 

141,004

 

 

 

125,605

 

Other long-term assets

 

2,800

 

 

 

3,194

 

Total assets

$

1,014,405

 

 

$

1,002,832

 

Liabilities and shareholders’ equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

3,874

 

 

$

1,506

 

Accrued compensation and related benefits

 

54,670

 

 

 

66,744

 

Other accrued liabilities

 

27,387

 

 

 

18,901

 

Operating lease liabilities, current

 

19,132

 

 

 

18,003

 

Deferred revenue

 

383,170

 

 

 

332,285

 

Total current liabilities

 

488,233

 

 

 

437,439

 

Operating lease liabilities, non-current

 

51,361

 

 

 

58,237

 

Deferred revenue, non-current

 

2,181

 

 

 

2,377

 

Other long-term liabilities

 

73

 

 

 

 

Total liabilities

 

541,848

 

 

 

498,053

 

Shareholders’ equity

 

 

 

Preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding as of October 31, 2022 and January 31, 2022

 

 

 

 

 

Class A common stock, no par value; 500,000,000 shares authorized, 130,869,093 shares issued and outstanding as of October 31, 2022; 500,000,000 shares authorized, 127,809,525 shares issued and outstanding as of January 31, 2022

 

 

 

 

 

Class B common stock, no par value; 500,000,000 shares authorized, no shares issued and outstanding as of October 31, 2022; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2022

 

 

 

 

 

Additional paid-in capital

 

1,189,485

 

 

 

1,047,313

 

Accumulated other comprehensive loss

 

(1,487

)

 

 

 

Accumulated deficit

 

(715,441

)

 

 

(542,534

)

Total shareholders’ equity

 

472,557

 

 

 

504,779

 

Total liabilities and shareholders’ equity

$

1,014,405

 

 

$

1,002,832

 

SMARTSHEET INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Nine Months Ended October 31,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities

 

 

 

Net loss

$

(172,907

)

 

$

(117,958

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Share-based compensation expense

 

127,458

 

 

 

80,067

 

Depreciation and amortization

 

18,476

 

 

 

15,226

 

Net amortization of premiums (discounts) on investments

 

(1,198

)

 

 

 

Amortization of deferred commission costs

 

36,712

 

 

 

31,175

 

Unrealized foreign currency (gain) loss

 

(760

)

 

 

136

 

Non-cash operating lease costs

 

11,631

 

 

 

11,101

 

Impairment of long-lived assets

 

1,544

 

 

 

 

Other

 

(1,636

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

2,739

 

 

 

(3,704

)

Prepaid expenses and other current assets

 

(894

)

 

 

(13,085

)

Other long-term assets

 

(336

)

 

 

678

 

Accounts payable

 

1,356

 

 

 

(1,079

)

Other accrued liabilities

 

8,494

 

 

 

6,257

 

Accrued compensation and related benefits

 

(10,975

)

 

 

4,174

 

Deferred commissions

 

(55,438

)

 

 

(50,174

)

Deferred revenue

 

49,673

 

 

 

43,750

 

Other long-term liabilities

 

37

 

 

 

 

Operating lease liabilities

 

(10,581

)

 

 

(9,924

)

Net cash provided by (used in) operating activities

 

3,395

 

 

 

(3,360

)

Cash flows from investing activities

 

 

 

Purchases of short-term investments

 

(384,363

)

 

 

 

Maturities of short-term investments

 

144,548

 

 

 

 

Purchase of long-term investments

 

 

 

 

(1,000

)

Purchases of property and equipment

 

(4,175

)

 

 

(9,169

)

Proceeds from sale of property and equipment

 

94

 

 

 

 

Proceeds from liquidation of an investment

 

622

 

 

 

 

Capitalized internal-use software development costs

 

(5,826

)

 

 

(5,509

)

Payments for business acquisition, net of cash and restricted cash acquired

 

(20,342

)

 

 

 

Net cash used in investing activities

 

(269,442

)

 

 

(15,678

)

Cash flows from financing activities

 

 

 

Proceeds from exercise of stock options

 

4,499

 

 

 

9,173

 

Taxes paid related to net share settlement of restricted stock units

 

(3,082

)

 

 

(4,914

)

Proceeds from contributions to Employee Stock Purchase Plan

 

9,959

 

 

 

12,969

 

Net cash provided by financing activities

 

11,376

 

 

 

17,228

 

Effects of changes in foreign currency exchange rates on cash, cash equivalents, and restricted cash

 

(131

)

 

 

(134

)

Change in cash, cash equivalents, and restricted cash

 

(254,802

)

 

 

(1,944

)

Cash, cash equivalents, and restricted cash at beginning of period

 

449,680

 

 

 

442,348

 

Cash, cash equivalents, and restricted cash at end of period

$

194,878

 

 

$

440,404

 

Supplemental disclosures

 

 

 

Cash paid for income tax

$

224

 

$

150

Accrued purchases of property and equipment, including internal-use software

 

1,727

 

 

 

726

 

Share-based compensation expense capitalized in internal-use software development costs

 

2,452

 

 

 

1,495

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

7,230

 

 

 

742

 

Right-of-use assets reductions related to operating lease terminations and impairments

 

1,535

 

 

 

 

SMARTSHEET INC.

Reconciliation from GAAP to Non-GAAP Financial Measures

(unaudited)

 

Reconciliation from GAAP to non-GAAP operating loss and operating margin

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

Loss from operations

$

(42,557

)

 

$

(35,980

)

 

$

(177,218

)

 

$

(117,891

)

Add:

 

 

 

 

 

 

 

Share-based compensation expense(1)

 

38,429

 

 

 

28,060

 

 

 

128,493

 

 

 

80,552

 

Amortization of acquisition-related intangible assets(2)

 

2,627

 

 

 

2,517

 

 

 

7,594

 

 

 

7,551

 

One-time acquisition costs

 

151

 

 

 

 

 

 

612

 

 

 

17

 

Litigation expenses and settlements(3)

 

(4,500

)

 

 

2,750

 

 

 

(4,500

)

 

 

10,000

 

Lease restructuring costs(4)

 

1,544

 

 

 

 

 

 

1,544

 

 

 

 

Non-GAAP operating loss

$

(4,306

)

 

$

(2,653

)

 

$

(43,475

)

 

$

(19,771

)

 

 

 

 

 

 

 

 

Operating margin

 

(21

)%

 

 

(25

)%

 

 

(32

)%

 

 

(30

)%

Non-GAAP operating margin

 

(2

)%

 

 

(2

)%

 

 

(8

)%

 

 

(5

)%

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.

(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized.

(3) Relates to matters that are outside the ordinary course of our business.

(4) Includes charges related to the reassessment of our real estate lease portfolio.

Reconciliation from GAAP to non-GAAP net loss

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

(in thousands)

Net loss

$

(40,137

)

 

$

(36,718

)

 

$

(172,907

)

 

$

(117,958

)

Add:

 

 

 

 

 

 

 

Share-based compensation expense(1)

 

38,429

 

 

 

28,060

 

 

 

128,493

 

 

 

80,552

 

Amortization of acquisition-related intangible assets(2)

 

2,627

 

 

 

2,517

 

 

 

7,594

 

 

 

7,551

 

One-time acquisition costs

 

151

 

 

 

 

 

 

612

 

 

 

17

 

Litigation expenses and settlements(3)

 

(4,500

)

 

 

2,750

 

 

 

(4,500

)

 

 

10,000

 

Lease restructuring costs(4)

 

1,544

 

 

 

 

 

 

1,544

 

 

 

 

Non-GAAP net loss

$

(1,886

)

 

$

(3,391

)

 

$

(39,164

)

 

$

(19,838

)

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.

(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized.

(3) Relates to matters that are outside the ordinary course of our business.

(4) Includes charges related to the reassessment of our real estate lease portfolio.

SMARTSHEET INC.

Reconciliation from GAAP to Non-GAAP Financial Measures

(unaudited)

 

Anti-dilutive shares

 

October 31,

2022

 

2021

 

 

 

 

 

(in thousands)

Shares subject to outstanding common stock awards

11,380

 

10,926

Shares issuable pursuant to the 2018 Employee Stock Purchase Plan

126

 

43

Total potentially dilutive shares

11,506

 

10,969

 

 

 

 

Reconciliation from net operating cash flow to free cash flow

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

(in thousands)

Net cash provided by (used in) operating activities

$

(1,773

)

 

$

(2,161

)

 

$

3,395

 

 

$

(3,360

)

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(1,168

)

 

 

(2,194

)

 

 

(4,175

)

 

 

(9,169

)

Capitalized internal-use software development costs

 

(1,705

)

 

 

(1,953

)

 

 

(5,826

)

 

 

(5,509

)

Free cash flow

$

(4,646

)

 

$

(6,308

)

 

$

(6,606

)

 

$

(18,038

)

Reconciliation from revenue to calculated billings

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

(in thousands)

Total revenue

$

199,577

 

$

144,628

 

$

554,578

 

$

393,446

Add:

 

 

 

 

 

 

 

Deferred revenue (end of period)

 

385,351

 

 

 

267,748

 

 

 

385,351

 

 

 

267,748

 

Less:

 

 

 

 

 

 

 

Deferred revenue (beginning of period)

 

365,346

 

 

 

250,826

 

 

 

334,662

 

 

 

223,997

 

Calculated billings

$

219,582

 

 

$

161,550

 

 

$

605,267

 

 

$

437,197

 

SMARTSHEET INC.

Reconciliation from GAAP to Non-GAAP Financial Measures

(unaudited)

 

Reconciliation from GAAP to non-GAAP operating loss guidance

 

Q4 FY 2023

 

FY 2023

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

(in millions)

Loss from operations

$

(63.0

)

 

$

(61.0

)

 

$

(239.7

)

 

$

(237.7

)

Add:

 

 

 

 

 

 

 

Share-based compensation expense(1)

 

52.0

 

 

 

52.0

 

 

 

180.5

 

 

 

180.5

 

Amortization of acquisition-related intangible assets(2)

 

3.0

 

 

 

3.0

 

 

 

10.6

 

 

 

10.6

 

One-time costs of acquisition

 

 

 

 

 

 

 

0.6

 

 

 

0.6

 

Litigation expenses and settlements(3)

 

 

 

 

 

 

 

(4.5

)

 

 

(4.5

)

Lease restructuring costs(4)

 

6.0

 

 

 

6.0

 

 

 

7.5

 

 

 

7.5

 

Non-GAAP operating loss

$

(2.0

)

 

$

 

 

$

(45.0

)

 

$

(43.0

)

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.

(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized.

(3) Relates to matters that are outside the ordinary course of our business.

(4) Includes charges related to the reassessment of our real estate lease portfolio.

Reconciliation from GAAP to non-GAAP net loss guidance

 

Q4 FY 2023

 

FY 2023

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

(in millions)

Net loss

$

(63.0

)

 

$

(61.0

)

 

$

(235.7

)

 

$

(233.7

)

Add:

 

 

 

 

 

 

 

Share-based compensation expense(1)

 

52.0

 

 

 

52.0

 

 

 

180.5

 

 

 

180.5

 

Amortization of acquisition-related intangible assets(2)

 

3.0

 

 

 

3.0

 

 

 

10.6

 

 

 

10.6

 

One-time costs of acquisition

 

 

 

 

 

 

 

0.6

 

 

 

0.6

 

Litigation expenses and settlements(3)

 

 

 

 

 

 

 

(4.5

)

 

 

(4.5

)

Lease restructuring costs(4)

 

6.0

 

 

 

6.0

 

 

 

7.5

 

 

 

7.5

 

Non-GAAP net loss

$

(2.0

)

 

$

 

 

$

(41.0

)

 

$

(39.0

)

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.

(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized.

(3) Relates to matters that are outside the ordinary course of our business.

(4) Includes charges related to the reassessment of our real estate lease portfolio.

 

Smartsheet Inc.
Investor Relations Contact
Aaron Turner
investorrelations@smartsheet.com

Media Contact
Chrissy Vaughn
pr@smartsheet.com

Source: Smartsheet Inc.