Smartsheet Inc. Announces Second Quarter Fiscal Year 2025 Results
-
Second quarter total revenue grew 17% year over year to
$276.4 million -
Annualized recurring revenue grew 17% year over year to
$1.093 billion -
Second quarter operating cash flow of
$59.1 million and record free cash flow of$57.2 million -
Ended the quarter with cash, cash equivalents, and short-term investments of
$706.6 million
"Q2 was a strong quarter highlighted by continued growth in the enterprise,” said
Second Quarter Fiscal 2025 Financial Highlights
-
Revenue: Total revenue was
$276.4 million , an increase of 17% year over year. Subscription revenue was$263.5 million , an increase of 19% year over year. Professional services revenue was$12.9 million , a decrease of (8)% year over year. -
Operating loss: GAAP operating loss was
$(8.5) million , or (3)% of total revenue, compared to$(36.1) million , or (15)% of total revenue, in the second quarter of fiscal 2024. -
Non-GAAP operating income: Non-GAAP operating income was
$45.3 million , or 16% of total revenue, compared to$19.2 million , or 8% of total revenue, in the second quarter of fiscal 2024. -
Net income (loss): GAAP net income was
$7.9 million , compared to GAAP net loss of$(33.4) million in the second quarter of fiscal 2024. GAAP basic and diluted net income per share was$0.06 , compared to GAAP basic and diluted net loss per share of$(0.25) in the second quarter of fiscal 2024. -
Non-GAAP net income: Non-GAAP net income was
$61.6 million , compared to$22.0 million in the second quarter of fiscal 2024. Non-GAAP basic and diluted net income per share was$0.45 and$0.44 , respectively, compared to non-GAAP basic and diluted net income per share of$0.16 in the second quarter of fiscal 2024. -
Cash flow: Netoperating cash flow was
$59.1 million , compared to$48.5 million in the second quarter of fiscal 2024. Free cash flow was$57.2 million , or 21% of total revenue, compared to$45.5 million , or 19% of total revenue, in the second quarter of fiscal 2024.
Second Quarter Fiscal 2025 Operational Highlights
-
Annualized recurring revenue ("ARR") was
$1.093 billion , an increase of 17% year over year -
Average ARR per domain-based customer was
$10,291 , an increase of 16% year over year - Dollar-based net retention rate was 113%
-
Number of all customers with ARR of
$100,000 or more grew to 2,056, an increase of 23% year over year -
Number of all customers with ARR of
$50,000 or more grew to 4,140, an increase of 17% year over year -
Number of all customers with ARR of
$5,000 or more grew to 20,198, an increase of 6% year over year
Second Quarter Fiscal 2025 Business Highlights
- Introduced a new subscription model to help customers realize more value by simplifying pricing, budgeting, and administration. The subscription model went into effect for new customers in June and existing customers will transition in the calendar year 2025
- Released board view, a new Kanban-style view that gives customers clear visibility into task status so they can see what’s in progress, what’s completed, and what’s coming up next at a glance
- Recognized with Customers’ Choice distinction in the 2024 Gartner® Peer Insights Voice of the Customer1 for the Collaborative Work Management market for the second year in a row
- Recognized as a “Vendor Who Shaped the Year” in two IDC reports: IDC, Worldwide Collaborative Applications Market Shares, 20232 and IDC, Worldwide Team Collaboration Applications Market Shares, 20233
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 Key Business Metrics" contains definitions of certain non-financial metrics provided within this earnings release.
Share Repurchase Program
In
Financial Outlook
For the third quarter of fiscal year 2025, the Company currently expects:
-
Total revenue of
$282 million to$285 million , representing year-over-year growth of 15% to 16% -
Non-GAAP operating income of
$42 million to$44 million -
Non-GAAP net income per share of
$0.29 to$0.31 , assuming diluted weighted-average shares outstanding of approximately 142.5 million
For the full fiscal year 2025, the Company currently expects:
-
ARR of
$1,177 million to$1,180 million , representing year-over-year growth of 14.2% to 14.5% -
Total revenue of
$1,116 million to$1,121 million , representing year-over-year growth of 16% to 17% -
Non-GAAP operating income of
$177 million to$182 million -
Non-GAAP net income per share of
$1.36 to$1.39 , assuming diluted weighted-average shares outstanding of approximately 141.9 million -
Free cash flow of
$240 million
We have not reconciled free cash flow or diluted weighted-average shares outstanding guidance to their most directly comparable GAAP measure due to the uncertainty regarding, and the potential variability of, the related reconciling items. For those reasons, we are also unable to address the probable significance of the unavailable information. Accordingly, a reconciliation for free cash flow and diluted weighted-average shares outstanding guidance is not available without unreasonable effort.
| _________________ |
|
1 GARTNER is a registered trademark and service mark, and PEER INSIGHTS is a trademark and service mark, of Gartner, Inc. and/or its affiliates in the |
|
2 doc #US51376924, |
|
3 doc #US51377124, |
Conference Call Information
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 third fiscal quarter ending
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; and our international expansion strategies. Further information on risks that could cause actual results to differ materially from forecasted results is included in our filings with the
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 income 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, as applicable. We define non-GAAP net income as GAAP net income (loss) excluding non-recurring income tax adjustments associated with mergers and acquisitions and the same exclusions that are used to derive non-GAAP operating income.
We define basic non-GAAP net income per share as non-GAAP net income divided by weighted-average shares outstanding ("WASO"). We define diluted non-GAAP net income per share as non-GAAP net income divided by diluted WASO. Diluted WASO includes the impact of potentially dilutive securities, which include stock options, restricted share units, performance share units, and shares subject to our 2018 employee stock purchase plan. There are a number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net income (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) and principal payments on finance lease obligations. 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, share repurchases, and potential acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate excess cash beyond what is required for our operations. 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.
Definitions of Key Business Metrics
Annualized recurring revenue
We define annualized recurring revenue, or ARR, as the annualized recurring value of all active subscription contracts at the end of a reporting period. We exclude the value of non-recurring revenue streams, such as our professional services revenue, that are recognized at a point in time. We use ARR as one of our operating measures to assess the strength of the Company’s subscription services. ARR is a performance metric and should be viewed independently of revenue and deferred revenue, and is not intended to be a substitute for, or combined with, any of these items. Both multi-year contracts and contracts with terms less than one year are annualized by dividing the total committed contract value by the number of months in the subscription term and then multiplying by 12. Annualizing contracts with terms less than one year results in amounts being included in our ARR calculation that are in excess of the total contract value for those contracts at the end of the reporting period. The value of subscription contracts that are sold through third-party resellers, wherein we do not have visibility into the pricing provided, is based on the list price.
Average ARR per domain-based customer
We use average ARR per domain-based customer to measure customer commitment to our platform and sales force productivity. We define average ARR per domain-based customer as total outstanding ARR 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 ARR from the cohort of all customers as of the 12 months prior to such period end (“Prior Period ARR”). We then calculate the ARR from these same customers as of the current period end (“Current Period ARR”). Current Period ARR 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 ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate. Any ARR 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.
The dollar-based net retention rate is used by us to evaluate the long-term value of our customer relationships and is driven by our ability to retain and expand the subscription revenue generated from our existing customers.
About
Disclosure of Material Information
|
Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
Revenue |
|
|
|
|
|
|
|
||||||||
|
Subscription |
$ |
263,530 |
|
|
$ |
221,522 |
|
|
$ |
512,625 |
|
|
$ |
427,523 |
|
|
Professional services |
|
12,882 |
|
|
|
14,063 |
|
|
|
26,771 |
|
|
|
27,948 |
|
|
Total revenue |
|
276,412 |
|
|
|
235,585 |
|
|
|
539,396 |
|
|
|
455,471 |
|
|
Cost of revenue |
|
|
|
|
|
|
|
||||||||
|
Subscription |
|
37,999 |
|
|
|
33,584 |
|
|
|
73,771 |
|
|
|
66,751 |
|
|
Professional services |
|
11,852 |
|
|
|
13,454 |
|
|
|
24,402 |
|
|
|
26,168 |
|
|
Total cost of revenue |
|
49,851 |
|
|
|
47,038 |
|
|
|
98,173 |
|
|
|
92,919 |
|
|
Gross profit |
|
226,561 |
|
|
|
188,547 |
|
|
|
441,223 |
|
|
|
362,552 |
|
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
|
Research and development |
|
63,600 |
|
|
|
58,358 |
|
|
|
126,037 |
|
|
|
114,548 |
|
|
Sales and marketing |
|
130,222 |
|
|
|
129,813 |
|
|
|
255,461 |
|
|
|
244,765 |
|
|
General and administrative |
|
41,219 |
|
|
|
36,523 |
|
|
|
79,334 |
|
|
|
71,501 |
|
|
Total operating expenses |
|
235,041 |
|
|
|
224,694 |
|
|
|
460,832 |
|
|
|
430,814 |
|
|
Loss from operations |
|
(8,480 |
) |
|
|
(36,147 |
) |
|
|
(19,609 |
) |
|
|
(68,262 |
) |
|
Interest income |
|
8,836 |
|
|
|
5,847 |
|
|
|
16,662 |
|
|
|
11,064 |
|
|
Other income (expense), net |
|
(263 |
) |
|
|
(55 |
) |
|
|
(640 |
) |
|
|
(591 |
) |
|
Income (loss) before income tax provision (benefit) |
|
93 |
|
|
|
(30,355 |
) |
|
|
(3,587 |
) |
|
|
(57,789 |
) |
|
Income tax provision (benefit) |
|
(7,765 |
) |
|
|
3,002 |
|
|
|
(2,587 |
) |
|
|
5,438 |
|
|
Net income (loss) |
$ |
7,858 |
|
|
$ |
(33,357 |
) |
|
$ |
(1,000 |
) |
|
$ |
(63,227 |
) |
|
Net income (loss) per share, basic |
$ |
0.06 |
|
|
$ |
(0.25 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.47 |
) |
|
Net income (loss) per share, diluted |
$ |
0.06 |
|
|
$ |
(0.25 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.47 |
) |
|
Weighted-average shares outstanding used to compute net income (loss) per share, basic |
|
138,408 |
|
|
|
133,829 |
|
|
|
137,923 |
|
|
|
133,196 |
|
|
Weighted-average shares outstanding used to compute net income (loss) per share, diluted |
|
141,157 |
|
|
|
133,829 |
|
|
|
137,923 |
|
|
|
133,196 |
|
|
Share-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands, unaudited): |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
Cost of subscription revenue |
$ |
3,020 |
|
|
$ |
3,357 |
|
|
$ |
6,072 |
|
|
$ |
6,816 |
|
|
Cost of professional services revenue |
|
1,511 |
|
|
1,915 |
|
|
3,249 |
|
|
3,825 |
||||
|
Research and development |
|
18,217 |
|
|
|
17,611 |
|
|
|
36,273 |
|
|
|
35,043 |
|
|
Sales and marketing |
|
14,424 |
|
|
|
18,989 |
|
|
|
31,019 |
|
|
|
38,043 |
|
|
General and administrative |
|
10,197 |
|
|
|
10,151 |
|
|
|
20,676 |
|
|
|
20,075 |
|
|
Total share-based compensation expense |
$ |
47,369 |
|
|
$ |
52,023 |
|
|
$ |
97,289 |
|
|
$ |
103,802 |
|
|
Condensed Consolidated Balance Sheets (in thousands, except share data) (unaudited) |
|||||||
|
|
|
|
|
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
393,487 |
|
|
$ |
282,094 |
|
|
Short-term investments |
|
313,082 |
|
|
|
346,701 |
|
|
Accounts receivable, net of allowances of |
|
193,076 |
|
|
|
238,708 |
|
|
Prepaid expenses and other current assets |
|
63,990 |
|
|
|
64,366 |
|
|
Total current assets |
|
963,635 |
|
|
|
931,869 |
|
|
Restricted cash |
|
18 |
|
|
|
19 |
|
|
Deferred commissions |
|
155,696 |
|
|
|
148,867 |
|
|
Property and equipment, net |
|
41,153 |
|
|
|
42,362 |
|
|
Operating lease right-of-use assets |
|
32,102 |
|
|
|
39,480 |
|
|
Intangible assets, net |
|
22,943 |
|
|
|
27,960 |
|
|
|
|
141,477 |
|
|
|
141,477 |
|
|
Other long-term assets |
|
5,817 |
|
|
|
5,445 |
|
|
Total assets |
$ |
1,362,841 |
|
|
$ |
1,337,479 |
|
|
Liabilities and shareholders’ equity |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
6,076 |
|
|
$ |
2,937 |
|
|
Accrued compensation and related benefits |
|
61,496 |
|
|
|
77,453 |
|
|
Other accrued liabilities |
|
30,743 |
|
|
|
30,534 |
|
|
Operating lease liabilities, current |
|
15,981 |
|
|
|
16,040 |
|
|
Finance lease liabilities, current |
|
280 |
|
|
|
216 |
|
|
Deferred revenue |
|
547,995 |
|
|
|
568,670 |
|
|
Total current liabilities |
|
662,571 |
|
|
|
695,850 |
|
|
Operating lease liabilities, non-current |
|
26,643 |
|
|
|
33,100 |
|
|
Finance lease liabilities, non-current |
|
339 |
|
|
|
455 |
|
|
Deferred revenue, non-current |
|
1,859 |
|
|
|
1,785 |
|
|
Other long-term liabilities |
|
538 |
|
|
|
434 |
|
|
Total liabilities |
|
691,950 |
|
|
|
731,624 |
|
|
Shareholders’ equity: |
|
|
|
||||
|
Preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding as of |
|
— |
|
|
|
— |
|
|
Class A common stock, no par value; 500,000,000 shares authorized, 138,533,780 shares issued and outstanding as of |
|
— |
|
|
|
— |
|
|
Class B common stock, no par value; 500,000,000 shares authorized, no shares issued and outstanding as of |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
1,575,180 |
|
|
|
1,468,805 |
|
|
Accumulated other comprehensive income (loss) |
|
(148 |
) |
|
|
(146 |
) |
|
Accumulated deficit |
|
(904,141 |
) |
|
|
(862,804 |
) |
|
Total shareholders’ equity |
|
670,891 |
|
|
|
605,855 |
|
|
Total liabilities and shareholders’ equity |
$ |
1,362,841 |
|
|
$ |
1,337,479 |
|
|
Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
|||||||
|
|
Six Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
|
Cash flows from operating activities |
|
|
|
||||
|
Net income (loss) |
$ |
(1,000 |
) |
|
$ |
(63,227 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
|
Share-based compensation expense |
|
97,289 |
|
|
|
103,802 |
|
|
Depreciation and amortization |
|
13,625 |
|
|
|
13,191 |
|
|
Net amortization of premiums (discounts) on investments |
|
(4,813 |
) |
|
|
(4,845 |
) |
|
Amortization of deferred commission costs |
|
32,564 |
|
|
|
24,378 |
|
|
Unrealized foreign currency (gain) loss |
|
(492 |
) |
|
|
483 |
|
|
Non-cash operating lease costs |
|
5,087 |
|
|
|
6,322 |
|
|
Impairment of long-lived assets |
|
3,237 |
|
|
|
— |
|
|
Other, net |
|
3,985 |
|
|
|
1,674 |
|
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
41,942 |
|
|
|
40,433 |
|
|
Prepaid expenses and other current assets |
|
254 |
|
|
|
49 |
|
|
Other long-term assets |
|
(761 |
) |
|
|
(798 |
) |
|
Accounts payable |
|
3,116 |
|
|
|
(602 |
) |
|
Other accrued liabilities |
|
(3,291 |
) |
|
|
8,000 |
|
|
Accrued compensation and related benefits |
|
(14,784 |
) |
|
|
(2,337 |
) |
|
Deferred commissions |
|
(39,393 |
) |
|
|
(38,840 |
) |
|
Deferred revenue |
|
(20,385 |
) |
|
|
3,183 |
|
|
Other long-term liabilities |
|
104 |
|
|
|
216 |
|
|
Operating lease liabilities |
|
(7,062 |
) |
|
|
(8,052 |
) |
|
Net cash provided by operating activities |
|
109,222 |
|
|
|
83,030 |
|
|
Cash flows from investing activities |
|
|
|
||||
|
Purchases of short-term investments |
|
(177,092 |
) |
|
|
(248,480 |
) |
|
Maturities of short-term investments |
|
218,259 |
|
|
|
174,900 |
|
|
Purchases of property and equipment |
|
(1,023 |
) |
|
|
(1,395 |
) |
|
Proceeds from sale of property and equipment |
|
34 |
|
|
|
27 |
|
|
Capitalized internal-use software development costs |
|
(5,317 |
) |
|
|
(4,815 |
) |
|
Net cash provided by (used in) investing activities |
|
34,861 |
|
|
|
(79,763 |
) |
|
Cash flows from financing activities |
|
|
|
||||
|
Proceeds from exercise of stock options |
|
9,930 |
|
|
|
1,070 |
|
|
Taxes paid related to net share settlement of restricted stock units |
|
(13,925 |
) |
|
|
(1,150 |
) |
|
Proceeds from contributions to Employee Stock Purchase Plan |
|
10,774 |
|
|
|
10,846 |
|
|
Principal payments of finance leases |
|
(52 |
) |
|
|
— |
|
|
Repurchases of Class A Common Stock and related costs |
|
(39,588 |
) |
|
|
— |
|
|
Net cash provided by (used in) financing activities |
|
(32,861 |
) |
|
|
10,766 |
|
|
Effects of changes in foreign currency exchange rates on cash, cash equivalents, and restricted cash |
|
(23 |
) |
|
|
6 |
|
|
|
|
|
|
||||
|
Net increase in cash, cash equivalents, and restricted cash |
|
111,199 |
|
|
|
14,039 |
|
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
282,442 |
|
|
|
223,757 |
|
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
393,641 |
|
|
$ |
237,796 |
|
|
Supplemental disclosures |
|
|
|
||||
|
Cash paid for interest |
$ |
15 |
|
|
$ |
— |
|
|
Cash paid for income tax |
|
3,917 |
|
|
6,186 |
|
|
|
Accrued purchases of property and equipment, including internal-use software |
|
819 |
|
|
|
1,255 |
|
|
Share-based compensation expense capitalized in internal-use software development costs |
|
1,807 |
|
|
|
2,065 |
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
541 |
|
|
|
— |
|
|
Right-of-use asset reductions related to operating leases |
|
2,832 |
|
|
|
1,033 |
|
|
Repurchases of Class A Common Stock and related costs in accrued expenses |
|
749 |
|
|
|
— |
|
|
Short-term investment securities purchased but not settled |
|
2,740 |
|
|
|
— |
|
|
Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) |
|||||||||||||||
|
Reconciliation from GAAP operating loss to non-GAAP operating income and operating margin |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(dollars in thousands) |
||||||||||||||
|
Loss from operations |
$ |
(8,480 |
) |
|
$ |
(36,147 |
) |
|
$ |
(19,609 |
) |
|
$ |
(68,262 |
) |
|
Add: |
|
|
|
|
|
|
|
||||||||
|
Share-based compensation expense(1) |
|
48,194 |
|
|
|
52,549 |
|
|
|
98,669 |
|
|
|
104,749 |
|
|
Amortization of acquisition-related intangible assets(2) |
|
2,305 |
|
|
|
2,707 |
|
|
|
5,012 |
|
|
|
5,416 |
|
|
Lease restructuring costs(3) |
|
3,279 |
|
|
|
110 |
|
|
|
3,319 |
|
|
|
116 |
|
|
Non-GAAP operating income |
$ |
45,298 |
|
|
$ |
19,219 |
|
|
$ |
87,391 |
|
|
$ |
42,019 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating margin |
|
(3 |
)% |
|
|
(15 |
)% |
|
|
(4 |
)% |
|
|
(15 |
)% |
|
Non-GAAP operating margin |
|
16 |
% |
|
|
8 |
% |
|
|
16 |
% |
|
|
9 |
% |
|
(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. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. |
|
|
(3) |
Includes charges related to the reassessment of our real estate lease portfolio. |
|
Reconciliation from GAAP net income (loss) to non-GAAP net income and per share data |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in thousands, except per share data) |
||||||||||||||
|
Net income (loss) |
$ |
7,858 |
|
|
$ |
(33,357 |
) |
|
$ |
(1,000 |
) |
|
$ |
(63,227 |
) |
|
Add: |
|
|
|
|
|
|
|
||||||||
|
Share-based compensation expense(1) |
|
48,194 |
|
|
52,549 |
|
|
|
98,669 |
|
|
|
104,749 |
|
|
|
Amortization of acquisition-related intangible assets(2) |
|
2,305 |
|
|
|
2,707 |
|
|
|
5,012 |
|
|
|
5,416 |
|
|
Lease restructuring costs(3) |
|
3,279 |
|
|
|
110 |
|
|
|
3,319 |
|
|
|
116 |
|
|
Non-GAAP net income |
$ |
61,636 |
|
|
$ |
22,009 |
|
|
$ |
106,000 |
|
|
$ |
47,054 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-GAAP net income per share, basic |
$ |
0.45 |
|
|
$ |
0.16 |
|
|
$ |
0.77 |
|
|
$ |
0.35 |
|
|
Non-GAAP net income per share, diluted |
$ |
0.44 |
|
|
$ |
0.16 |
|
|
$ |
0.75 |
|
|
$ |
0.34 |
|
|
(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. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. |
|
|
(3) |
Includes charges related to the reassessment of our real estate lease portfolio. |
|
Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) |
|||||||||||
|
Non-GAAP reconciliation from basic to diluted weighted-average shares outstanding |
|||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands) |
||||||||||
|
Weighted-average shares outstanding; basic |
138,408 |
|
133,829 |
|
137,923 |
|
133,196 |
||||
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
||||
|
Shares subject to outstanding common stock awards |
2,749 |
|
|
3,541 |
|
|
2,715 |
|
|
3,864 |
|
|
Weighted-average common shares outstanding; diluted |
141,157 |
|
|
137,370 |
|
|
140,638 |
|
|
137,060 |
|
|
Reconciliation from net operating cash flow to free cash flow |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in thousands) |
||||||||||||||
|
Net cash provided by operating activities |
$ |
59,144 |
|
|
$ |
48,459 |
|
|
$ |
109,222 |
|
|
$ |
83,030 |
|
|
Less: |
|
|
|
|
|
|
|
||||||||
|
Purchases of property and equipment |
|
(410 |
) |
|
|
(542 |
) |
|
|
(1,023 |
) |
|
|
(1,395 |
) |
|
Capitalized internal-use software development costs |
|
(1,566 |
) |
|
|
(2,418 |
) |
|
|
(5,317 |
) |
|
|
(4,815 |
) |
|
Principal payments of finance leases |
|
(18 |
) |
|
— |
|
|
|
(52 |
) |
|
|
— |
|
|
|
Free cash flow |
$ |
57,150 |
|
|
$ |
45,499 |
|
|
$ |
102,830 |
|
|
$ |
76,820 |
|
|
Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) |
|||||||||||||||
|
Reconciliation from GAAP operating loss to non-GAAP operating income guidance |
|||||||||||||||
|
|
Q3 FY 2025 |
|
FY 2025 |
||||||||||||
|
|
Low |
|
High |
|
Low |
|
High |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in millions) |
||||||||||||||
|
Loss from operations |
$ |
(9.9 |
) |
|
$ |
(7.9 |
) |
|
$ |
(41.8 |
) |
|
$ |
(36.8 |
) |
|
Add: |
|
|
|
|
|
|
|
||||||||
|
Share-based compensation expense(1) |
|
49.5 |
|
|
|
49.5 |
|
|
|
205.0 |
|
|
|
205.0 |
|
|
Amortization of acquisition-related intangible assets(2) |
|
2.3 |
|
|
|
2.3 |
|
|
|
9.6 |
|
|
|
9.6 |
|
|
Lease restructuring costs(3) |
|
0.1 |
|
|
|
0.1 |
|
|
|
4.2 |
|
|
|
4.2 |
|
|
Non-GAAP operating income |
$ |
42.0 |
|
|
$ |
44.0 |
|
|
$ |
177.0 |
|
|
$ |
182.0 |
|
|
(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. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. |
|
|
(3) |
Includes charges related to the reassessment of our real estate lease portfolio. |
|
Reconciliation from GAAP net loss to non-GAAP net income guidance |
|||||||||||||||
|
|
Q3 FY 2025 |
|
FY 2025 |
||||||||||||
|
|
Low |
|
High |
|
Low |
|
High |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in millions) |
||||||||||||||
|
Net loss |
$ |
(10.1 |
) |
|
$ |
(8.1 |
) |
|
$ |
(26.8 |
) |
|
$ |
(21.8 |
) |
|
Add: |
|
|
|
|
|
|
|
||||||||
|
Share-based compensation expense(1) |
|
49.5 |
|
|
|
49.5 |
|
|
|
205.0 |
|
|
|
205.0 |
|
|
Amortization of acquisition-related intangible assets(2) |
|
2.3 |
|
|
|
2.3 |
|
|
|
9.6 |
|
|
|
9.6 |
|
|
Lease restructuring costs(3) |
|
0.1 |
|
|
|
0.1 |
|
|
|
4.2 |
|
|
|
4.2 |
|
|
Non-GAAP net income |
$ |
41.8 |
|
|
$ |
43.8 |
|
|
$ |
192.0 |
|
|
$ |
197.0 |
|
|
(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. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. |
|
|
(3) |
Includes charges related to the reassessment of our real estate lease portfolio. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240905914523/en/
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