On September 5, 2024, Smartsheet Inc (SMAR, Financial) released its 8-K filing detailing the financial results for the second fiscal quarter ended July 31, 2024. Smartsheet, a provider of collaborative work management software delivered via a cloud-based, software-as-a-service model, reported significant growth in revenue and a positive net income for the quarter.
Performance and Challenges
Smartsheet Inc (SMAR, Financial) reported total revenue of $276.4 million for Q2 2025, surpassing the analyst estimate of $274.19 million. This represents a 17% year-over-year increase. Subscription revenue grew by 19% to $263.5 million, while professional services revenue saw a decline of 8% to $12.9 million. The company also reported a GAAP net income of $7.9 million, a significant improvement from the GAAP net loss of $(33.4) million in the same quarter last year.
Despite the positive revenue growth, Smartsheet faces challenges in maintaining its professional services revenue and managing operating expenses. The company reported a GAAP operating loss of $(8.5) million, although this is a marked improvement from the $(36.1) million loss in Q2 2024.
Financial Achievements
Smartsheet's financial achievements this quarter are noteworthy, particularly in the context of the software industry. The company reported a non-GAAP operating income of $45.3 million, up from $19.2 million in Q2 2024. Additionally, the non-GAAP net income was $61.6 million, compared to $22.0 million in the same period last year. These figures highlight Smartsheet's ability to generate substantial income from its core operations.
Key Financial Metrics
Several key metrics from Smartsheet's financial statements underscore the company's robust performance:
| Metric | Q2 2025 | Q2 2024 |
|---|---|---|
| Total Revenue | $276.4 million | $235.6 million |
| GAAP Net Income (Loss) | $7.9 million | $(33.4) million |
| Non-GAAP Net Income | $61.6 million | $22.0 million |
| Operating Cash Flow | $59.1 million | $48.5 million |
| Free Cash Flow | $57.2 million | $45.5 million |
Operational Highlights
Smartsheet's annualized recurring revenue (ARR) grew by 17% year-over-year to $1.093 billion. The company also reported a dollar-based net retention rate of 113%, indicating strong customer retention and expansion. The number of customers with ARR of $100,000 or more increased by 23% to 2,056.
"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."
Financial Outlook
Looking ahead, Smartsheet Inc (SMAR, Financial) expects total revenue for Q3 2025 to be between $282 million and $285 million, representing year-over-year growth of 15% to 16%. The company also anticipates a non-GAAP operating income of $42 million to $44 million and non-GAAP net income per share of $0.29 to $0.31.
For the full fiscal year 2025, Smartsheet projects ARR of $1,177 million to $1,180 million, total revenue of $1,116 million to $1,121 million, and non-GAAP net income per share of $1.36 to $1.39.
Smartsheet Inc (SMAR, Financial) continues to demonstrate strong financial performance and growth potential, making it a compelling consideration for value investors. For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Smartsheet Inc for further details.
