Smartsheet Inc (SMAR) Reports Robust Revenue Growth and Improved Cash Flow in Q3 FY2024
Smartsheet Inc (NYSE:SMAR) announced a 23% year-over-year increase in total revenue for Q3 FY2024.
The company reported a significant improvement in operating cash flow and free cash flow.
Non-GAAP operating income reached $19.4 million, compared to a non-GAAP operating loss in the same quarter last year.
Smartsheet Inc (NYSE:SMAR) provided a positive financial outlook for Q4 FY2024 and the full fiscal year.
On December 7, 2023, Smartsheet Inc (NYSE:SMAR) released its 8-K filing, detailing the financial results for the third quarter of the fiscal year 2024. The company, a leader in enterprise work management platforms, has reported a substantial 23% increase in total revenue, reaching $245.9 million. This growth was primarily driven by a 25% increase in subscription revenue, which amounted to $232.5 million. Professional services revenue remained relatively flat compared to the previous year.
Financial Performance Overview
Smartsheet Inc (NYSE:SMAR) has shown a notable improvement in its financial health, with a GAAP operating loss reduction from $(42.6) million in Q3 FY2023 to $(35.5) million in Q3 FY2024. The non-GAAP operating income was a positive $19.4 million, or 8% of total revenue, a significant turnaround from the non-GAAP operating loss of $(4.3) million in the same quarter of the previous year.
The company's GAAP net loss also narrowed to $(32.4) million, down from $(40.1) million year over year. On a per-share basis, the GAAP net loss per share improved to $(0.24) from $(0.31). In contrast, non-GAAP net income was reported at $22.6 million, with non-GAAP basic and diluted net income per share at $0.17 and $0.16, respectively.
Cash Flow and Liquidity
Smartsheet Inc (NYSE:SMAR) has also reported a strong cash flow performance. Net operating cash flow stood at $15.1 million, compared to $(1.8) million in the prior year's quarter. Free cash flow was positive at $11.4 million, or 5% of total revenue, which is a significant improvement from the negative free cash flow of $(4.6) million in Q3 FY2023. The company ended the quarter with a healthy balance of cash, cash equivalents, and short-term investments totaling $568.7 million.
Operational and Business Highlights
From an operational standpoint, Smartsheet Inc (NYSE:SMAR) reported calculated billings of $268.5 million, a 22% year-over-year growth. The dollar-based net retention rate was 118%. The company also saw growth in the number of customers with significant annualized contract values (ACV), with those at $100,000 or more increasing by 32% year over year.
During the quarter, Smartsheet Inc (NYSE:SMAR) announced new platform features at its annual ENGAGE customer conference, launched Australia-based data hosting, and received recognition in The Q3 2023 Constellation ShortList for Digital Asset Management.
Forward-Looking Financial Outlook
Looking ahead, Smartsheet Inc (NYSE:SMAR) provided an optimistic financial outlook for Q4 FY2024, with total revenue expected to be between $254 million and $256 million, representing a 20% to 21% year-over-year growth. Non-GAAP operating income is projected to be between $21 million and $23 million, and non-GAAP net income per share is forecasted to be between $0.17 and $0.19. For the full fiscal year 2024, the company anticipates total revenue of $955 million to $957 million, a 25% year-over-year growth, with non-GAAP operating income of $82 million to $84 million and non-GAAP net income per share of $0.68 to $0.69.
Smartsheet Inc (NYSE:SMAR) is poised to continue its growth trajectory, leveraging its innovative platform to meet the evolving needs of enterprise customers. The company's financial results reflect its commitment to operational excellence and its ability to adapt to market demands.
Explore the complete 8-K earnings release (here) from Smartsheet Inc for further details.
This article first appeared on GuruFocus.
