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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  September 5, 2024

Smartsheet Inc.
(Exact name of registrant as specified in its charter)
 
Washington 001-38464 20-2954357
(State or other jurisdiction
of incorporation)		 (Commission
File Number)		 (I.R.S. Employer Identification
No.)
 
500 108th Ave NE, Suite 200
Bellevue,WA98004
(Address of principal executive offices and zip code)
(844)324-2360
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐         Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, no par value per shareSMARThe New York Stock Exchange
    Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

    Emerging growth company ☐ 

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐ 



Item 2.02 - Results of Operations and Financial Condition

On September 5, 2024, Smartsheet Inc. (the "Company") issued a press release announcing its results for the quarter ended July 31, 2024. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02, including Exhibit 99.1 to this Current Report, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document filed by the Company with the Securities and Exchange Commission (the "SEC"), whether made before or after the date of this Current Report, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 - Financial Statements and Exhibits
 
(d)                                 Exhibits.
 
Exhibit No.Description
99.1 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  
  SMARTSHEET INC.
   
 By:/s/ Pete Godbole
 Name:Pete Godbole
 Title:Chief Financial Officer & Treasurer
   
   
Date:September 5, 2024  


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

BELLEVUE, Wash. - September 5, 2024 - Smartsheet Inc. (NYSE: SMAR), the enterprise work management platform, today announced financial results for its second fiscal quarter ended July 31, 2024.

"Q2 was a strong quarter highlighted by continued growth in the enterprise,” said Mark Mader, CEO of Smartsheet. “Our customers are scaling their work on Smartsheet, with over 70 customers expanding their Smartsheet annualized recurring revenue by more than $100,000 this quarter. We have a significant opportunity ahead to drive durable, long-term growth. We’ve been investing in product innovations that empower our customers to manage their work at an even larger scale on our platform, which we look forward to sharing more about at our annual customer conference, ENGAGE Seattle, in a few weeks."

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: Net operating 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 April 2024, Smartsheet’s Board of Directors authorized the repurchase of up to $150 million of the Company’s outstanding Class A common stock. As of July 31, 2024, Smartsheet has completed over $40 million in aggregate repurchases.

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
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 U.S. and internationally and are used herein with permission. All rights reserved. Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences with the vendors listed on the platform, should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates. Gartner does not endorse any vendor, product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or completeness, including any warranties of merchantability or fitness for a particular purpose.
2 doc #US51376924, July 2024
3 doc #US51377124, August 2024


•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.

Conference Call Information

Smartsheet will host a conference call and live webcast for analysts and investors at 1:30 p.m. Pacific Time on September 5, 2024. A live webcast and accompanying presentation can be accessed through the events section of the Smartsheet investor relations 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 U.S.). The conference ID is 7672979. A replay of the conference call will be available starting approximately two hours after the conclusion of the live event and will be available for seven days. The dial-in for the replay is (800) 770-2030 or +1 (609) 800-9909 (outside of the U.S.).

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 October 31, 2024, the full fiscal year ending January 31, 2025, 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; 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 SEC, including our Quarterly Report on Form 10-Q for the quarter ended July 31, 2024 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 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 Smartsheet

Smartsheet (NYSE: SMAR) is the modern enterprise work management platform trusted by millions of people at companies across the globe, including 85% of the 2023 Fortune 500 companies. The category pioneer and market leader, Smartsheet delivers powerful solutions fueling performance and driving the next wave of innovation. 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 July 31,Six Months Ended July 31,
2024202320242023
Revenue
Subscription$263,530 $221,522 $512,625 $427,523 
Professional services12,882 14,063 26,771 27,948 
Total revenue276,412 235,585 539,396 455,471 
Cost of revenue
Subscription37,999 33,584 73,771 66,751 
Professional services11,852 13,454 24,402 26,168 
Total cost of revenue49,851 47,038 98,173 92,919 
Gross profit226,561 188,547 441,223 362,552 
Operating expenses
Research and development63,600 58,358 126,037 114,548 
Sales and marketing130,222 129,813 255,461 244,765 
General and administrative41,219 36,523 79,334 71,501 
Total operating expenses235,041 224,694 460,832 430,814 
Loss from operations(8,480)(36,147)(19,609)(68,262)
Interest income8,836 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, basic138,408 133,829 137,923 133,196 
Weighted-average shares outstanding used to compute net income (loss) per share, diluted141,157 133,829 137,923 133,196 
Share-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands, unaudited):
Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
Cost of subscription revenue$3,020 $3,357 $6,072 $6,816 
Cost of professional services revenue1,511 1,915 3,249 3,825 
Research and development18,217 17,611 36,273 35,043 
Sales and marketing14,424 18,989 31,019 38,043 
General and administrative10,197 10,151 20,676 20,075 
Total share-based compensation expense$47,369 $52,023 $97,289 $103,802 



SMARTSHEET INC.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)

July 31, 2024January 31, 2024
Assets
Current assets:
Cash and cash equivalents$393,487 $282,094 
Short-term investments313,082 346,701 
Accounts receivable, net of allowances of $4,151 and $6,560, respectively193,076 238,708 
Prepaid expenses and other current assets63,990 64,366 
Total current assets963,635 931,869 
Restricted cash18 19 
Deferred commissions155,696 148,867 
Property and equipment, net41,153 42,362 
Operating lease right-of-use assets32,102 39,480 
Intangible assets, net22,943 27,960 
Goodwill141,477 141,477 
Other long-term assets5,817 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 benefits61,496 77,453 
Other accrued liabilities30,743 30,534 
Operating lease liabilities, current15,981 16,040 
Finance lease liabilities, current280 216 
Deferred revenue547,995 568,670 
Total current liabilities662,571 695,850 
Operating lease liabilities, non-current26,643 33,100 
Finance lease liabilities, non-current339 455 
Deferred revenue, non-current1,859 1,785 
Other long-term liabilities538 434 
Total liabilities691,950 731,624 
Shareholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding as of July 31, 2024 and January 31, 2024— — 
Class A common stock, no par value; 500,000,000 shares authorized, 138,533,780 shares issued and outstanding as of July 31, 2024; 500,000,000 shares authorized, 136,884,011 shares issued and outstanding as of January 31, 2024— — 
Class B common stock, no par value; 500,000,000 shares authorized, no shares issued and outstanding as of July 31, 2024 and January 31, 2024— — 
Additional paid-in capital1,575,180 1,468,805 
Accumulated other comprehensive income (loss)(148)(146)
Accumulated deficit(904,141)(862,804)
Total shareholders’ equity670,891 605,855 
Total liabilities and shareholders’ equity$1,362,841 $1,337,479 



SMARTSHEET INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended July 31,
20242023
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 expense97,289 103,802 
Depreciation and amortization13,625 13,191 
Net amortization of premiums (discounts) on investments(4,813)(4,845)
Amortization of deferred commission costs32,564 24,378 
Unrealized foreign currency (gain) loss(492)483 
Non-cash operating lease costs5,087 6,322 
Impairment of long-lived assets3,237 — 
Other, net3,985 1,674 
Changes in operating assets and liabilities:
Accounts receivable41,942 40,433 
Prepaid expenses and other current assets254 49 
Other long-term assets(761)(798)
Accounts payable3,116 (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 liabilities104 216 
Operating lease liabilities(7,062)(8,052)
Net cash provided by operating activities109,222 83,030 
Cash flows from investing activities
Purchases of short-term investments(177,092)(248,480)
Maturities of short-term investments218,259 174,900 
Purchases of property and equipment(1,023)(1,395)
Proceeds from sale of property and equipment34 27 
Capitalized internal-use software development costs(5,317)(4,815)
Net cash provided by (used in) investing activities34,861 (79,763)
Cash flows from financing activities
Proceeds from exercise of stock options9,930 1,070 
Taxes paid related to net share settlement of restricted stock units(13,925)(1,150)
Proceeds from contributions to Employee Stock Purchase Plan10,774 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 period282,442 223,757 
Cash, cash equivalents, and restricted cash at end of period$393,641 $237,796 


SMARTSHEET INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Supplemental disclosures
Cash paid for interest$15 $— 
Cash paid for income tax3,917 6,186 
Accrued purchases of property and equipment, including internal-use software819 1,255 
Share-based compensation expense capitalized in internal-use software development costs1,807 2,065 
Right-of-use assets obtained in exchange for new operating lease liabilities541 — 
Right-of-use asset reductions related to operating leases2,832 1,033 
Repurchases of Class A Common Stock and related costs in accrued expenses749 — 
Short-term investment securities purchased but not settled 2,740 — 


SMARTSHEET INC.
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 July 31,Six Months Ended July 31,
2024202320242023
(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 margin16 %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 July 31,Six Months Ended July 31,
2024202320242023
(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.


SMARTSHEET INC.
Reconciliation from GAAP to Non-GAAP Financial Measures
(unaudited)


Non-GAAP reconciliation from basic to diluted weighted-average shares outstanding
Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
(in thousands)
Weighted-average shares outstanding; basic138,408 133,829 137,923 133,196 
Effect of dilutive securities:
Shares subject to outstanding common stock awards2,749 3,541 2,715 3,864 
Weighted-average common shares outstanding; diluted141,157 137,370 140,638 137,060 

Reconciliation from net operating cash flow to free cash flow
Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
(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 





SMARTSHEET INC.
Reconciliation from GAAP to Non-GAAP Financial Measures
(unaudited)

Reconciliation from GAAP operating loss to non-GAAP operating income guidance
Q3 FY 2025FY 2025
LowHighLowHigh
(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 2025FY 2025
LowHighLowHigh
(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.



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

Media Contact
Jennifer Henderson
pr@smartsheet.com

v3.24.2.u1
Cover Cover
Sep. 05, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Sep. 05, 2024
Entity Registrant Name Smartsheet Inc.
Entity Incorporation, State or Country Code WA
Entity File Number 001-38464
Entity Tax Identification Number 20-2954357
Entity Address, Address Line One 500 108th Ave NE, Suite 200
Entity Address, City or Town Bellevue,
Entity Address, State or Province WA
Entity Address, Postal Zip Code 98004
City Area Code (844)
Local Phone Number 324-2360
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A common stock, no par value per share
Trading Symbol SMAR
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001366561
Amendment Flag false
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