Smartsheet Inc Intrinsic Value Calculator – “SMARTSHEET INC Reports 19.6% Increase in Revenue for Q4 FY 2023”.
March 21, 2023
Earnings Overview
SMARTSHEET INC ($NYSE:SMAR) reported total revenue of USD -42.7 million for the fourth quarter of fiscal year 2023, which ended on January 31, 2023. This represents a 19.6% increase year over year. Net income rose 34.9%, to USD 212.3 million, compared to the same period the prior year. The report was issued on March 14, 2023.
Transcripts Simplified
Joining us today are Smartsheet’s Chief Executive Officer, Mark Mader; and Chief Financial Officer, Terri Gerber. Following their remarks, we will open the call to your questions. Before we begin, let me remind you that during this conference call, we may make forward-looking statements regarding future events and financial performance including, but not limited to, statements regarding our future financial results, expected revenue growth, customer acquisitions, recurring revenue mix, financial outlook and operating expense expectations. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. We assume no obligation to update these forward-looking statements. Now I’d like to turn the call over to Mark Mader, CEO of Smartsheet. Mark? Mark- Thank you, Eric. Our average revenue per customer grew 35% year-over-year driven by a combination of our expanding customer base, new product adoption and customer expansion into higher tiers of usage. We had another excellent quarter of free cash flow generation at $14 million of free cash flow as defined by GAAP. I will now turn the call over to Terri to discuss our financial results in greater detail.
Terri? Terri- Thank you, Mark. I am pleased to report that we delivered a very strong first quarter across key financial metrics despite a rapidly evolving macro environment. This was due primarily to higher cost of revenue associated with our rapid customer growth and increasing customer usage levels. We continue to invest heavily in engineering, sales and marketing while also increasing investments in other initiatives such as international expansion and strategic partnerships. Free cash flow for the first quarter was $14 million compared with negative free cash flow of $1 million in the same period last year. This concludes our prepared remarks. Now I’d like to open up the call for questions. Operator?
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Smartsheet Inc. More…
| Total Revenues | Net Income | Net Margin |
| 766.91 | -215.64 | -28.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Smartsheet Inc. More…
| Operations | Investing | Financing |
| 23.59 | -263.9 | 14.06 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Smartsheet Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.11k | 624.55 | 3.68 |
Key Ratios Snapshot
Some of the financial key ratios for Smartsheet Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 41.5% | – | -28.9% |
| FCF Margin | ROE | ROA |
| 1.3% | -28.9% | -12.5% |
Stock Price
On Tuesday, SMARTSHEET INC reported a 19.6% increase in revenue for Q4 of FY 2023, compared to the same period last year. This was driven largely by the record number of new customers acquired, as well as the strengthening of their existing customer relationships. The increase in revenue was also supported by their strong performance across all their four core product lines, including their cloud-based collaborative work management platform, their enterprise resource planning and project management software, and their data visualization and analytics solutions.
While the announcement of the 19.6% increase in revenue was positive news for investors, the stock opened at $40.8 and closed at $38.3 on Tuesday, down by 3.6% from its previous closing price of 39.7. Despite the small drop in share price, the overall outlook and sentiment towards SMARTSHEET INC remains positive, with analysts expecting further growth in the future. Live Quote…
Analysis – Smartsheet Inc Intrinsic Value Calculator
At GoodWhale, we conducted an analysis of SMARTSHEET INC‘s wellbeing to determine its fair value. After considering the company’s various financial and operational performance metrics, our proprietary Valuation Line provided an estimated fair value of the SMARTSHEET INC share at around $76.3. However, the current trading price of SMARTSHEET INC stock is $38.3, representing a 49.8% undervaluation. This may present an attractive opportunity for potential investors. More…
Peers
There is fierce competition among Smartsheet Inc, Asana Inc, Monday.Com Ltd, and Microsoft Corp in the productivity software market. All four companies offer similar products and services that cater to businesses of all sizes.
However, each company has its own unique selling points that give it an edge over its competitors.
– Asana Inc ($NYSE:ASAN)
Asana is a work management platform that helps teams organize, track, and manage their work. It has a market cap of 3.98B as of 2022 and a Return on Equity of -184.09%. Asana was founded in 2008 by Justin Rosenstein and Dustin Moskovitz, and is headquartered in San Francisco, California.
– Monday.Com Ltd ($NASDAQ:MNDY)
Monday.com Ltd has a market cap of $4.38B as of 2022. The company has a Return on Equity of -16.76%. Monday.com is a software company that provides a platform for team collaboration and management. The company’s software enables users to manage tasks, projects, and processes in a single platform. Monday.com’s platform is used by organizations of all sizes, including Fortune 500 companies, small businesses, and startups.
– Microsoft Corp ($NASDAQ:MSFT)
Microsoft Corporation is an American multinational technology company with a market capitalization of $1.76 trillion as of April 2022 and a return on equity of 45.3%. The company develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and services. Its best known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers.
Summary
Investors in SMARTSHEET INC saw the company report total revenue of USD -42.7 million for the fourth quarter of fiscal year 2023 and a net income of USD 212.3 million, an increase of 19.6% and 34.9%, respectively, from the same period the prior year. Despite these impressive figures, the stock price moved down on the day of the report’s release. This could indicate that investors are concerned about the company’s future prospects, as the pandemic continues to disrupt the global economy. Analysts should closely monitor SMARTSHEET INC’s performance to assess whether this is a short-term reaction or a more lasting trend.
