Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Smartsheet Inc. Announces Fourth Quarter and Full Fiscal Year 2022 Results By: Smartsheet Inc. via Business Wire March 15, 2022 at 16:05 PM EDT Fourth quarter total revenue grew 43% year over year to $157.4 million Fourth quarter calculated billings grew 48% year over year to $224.3 million Fourth quarter net operating cash flow was negative $0.2 million, net free cash flow was negative $2.7 million Smartsheet Inc. (NYSE: SMAR), the enterprise platform for dynamic work, today announced financial results for its fourth fiscal quarter ended January 31, 2022. "Our results this quarter cap off an incredible fiscal year at Smartsheet,” said Mark Mader, President and CEO of Smartsheet. “We once again set new quarterly records for large deals and accelerated annual billings growth. Our momentum has never been stronger. We enter FY23 with a growing team that is focused on delivering the market-leading innovation that is increasingly vital for our customers. The global work management market is thriving, and customers are choosing Smartsheet in record numbers." Fourth Quarter Fiscal 2022 Financial Highlights Revenue: Total revenue was $157.4 million, an increase of 43% year over year. Subscription revenue was $145.7 million, an increase of 44% year over year. Professional services revenue was $11.7 million, an increase of 34% year over year. Operating Loss: GAAP operating loss was $52.1 million, or 33% of total revenue, compared to GAAP operating loss of $29.0 million, or 26% of total revenue, in the fourth quarter of fiscal 2021. Non-GAAP operating loss was $14.5 million, or 9% of total revenue, compared to non-GAAP operating loss of $5.3 million, or 5% of total revenue, in the fourth quarter of fiscal 2021. Net Loss: GAAP net loss was $53.1 million, compared to GAAP net loss of $28.7 million in the fourth quarter of fiscal 2021. GAAP net loss per share was $0.42, compared to GAAP net loss per share of $0.23 in the fourth quarter of fiscal 2021. Non-GAAP net loss was $15.5 million, compared to non-GAAP net loss of $4.9 million in the fourth quarter of fiscal 2021. Non-GAAP net loss per share was $0.12, compared to non-GAAP net loss per share of $0.04 in the fourth quarter of fiscal 2021. Cash Flow: Net operating cash flow was negative $0.2 million, compared to net operating cash flow of positive $15.2 million in the fourth quarter of fiscal 2021. Net free cash flow was negative $2.7 million, compared to positive $9.9 million in the fourth quarter of fiscal 2021. Fiscal Year 2022 Financial Highlights Revenue: Total revenue was $550.8 million, an increase of 43% year over year. Subscription revenue was $507.4 million, an increase of 44% year over year. Professional services revenue was $43.5 million, an increase of 33% year over year. Operating Loss: GAAP operating loss was $170.0 million, or 31% of total revenue, compared to GAAP operating loss of $120.5 million, or 31% of total revenue, in fiscal 2021. Non-GAAP operating loss was $34.2 million, or 6% of total revenue, compared to non-GAAP operating loss of $41.2 million, or 11% of total revenue, in fiscal 2021. Net Loss: GAAP net loss was $171.1 million, compared to $115.0 million in fiscal 2021. GAAP net loss per share was $1.36, compared to GAAP net loss per share of $0.95 in fiscal 2021. Non-GAAP net loss was $35.3 million, compared to non-GAAP net loss of $39.7 million in fiscal 2021. Non-GAAP net loss per share was $0.28, compared to non-GAAP net loss per share of $0.33 in fiscal 2021. Cash Flow: Net operating cash flow was negative $3.5 million, compared to net operating cash flow of negative $15.6 million in fiscal 2021. Net free cash flow was negative $20.8 million, compared to negative $31.6 million in fiscal 2021. Fiscal Year 2022 Business Highlights Ended the year with a dollar-based net retention rate of 134%, an increase from 123% at the end of fiscal year 2021 The number of all customers with annualized contract values ("ACV") of $100,000 or more grew to 1,026, an increase of 74% year over year The number of all customers with ACV of $50,000 or more grew to 2,354, an increase of 55% year over year The number of all customers with ACV of $5,000 or more grew to 15,150, an increase of 28% year over year Average ACV per domain-based customer increased to $6,977, an increase of 37% year over year Ended the year with 2,539 employees, up 624 from the end of fiscal year 2021 Introduced Smartsheet Advance, a tiered premium offering to unlock the full potential of Smartsheet’s platform for customers as they scale Introduced Pro Plan, our updated entry-level plan, allowing new customers to get started in a more collaborative and cost-efficient way Launched Smartsheet Regions, with the first region in the European Union, giving global organizations more control over where they host their Smartsheet content Enhanced Smartsheet’s enterprise-grade security and governance by introducing Enterprise Plan Manager, customer managed encryption keys, and expanded data retention controls Released Work Insights, a new capability that automatically aggregates customers’ data and visualizes it to help uncover key trends, activities, and bottlenecks Unified Smartsheet’s Resource Management tool with the core Smartsheet platform so customers can access their resourcing plans directly from their project sheets Expanded Smartsheet’s ecosystem, including new integrations with Webex, Lucidspark, and HubSpot and new partnerships with McAfee and UiPath Smartsheet and Brandfolder were recognized as leaders on G2’s Grid for Project and Portfolio Management Software and Grid for Digital Asset Management Software, respectively 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 Business Metrics" contains definitions of certain non-financial metrics provided within this earnings release. Financial Outlook For the first quarter of fiscal year 2023, the Company currently expects: Total revenue of $162 million to $163 million, representing year-over-year growth of 38% to 39% Non-GAAP operating loss of $25 million to $23 million Non-GAAP net loss per share of $0.20 to $0.18, assuming basic and diluted weighted average shares outstanding of approximately 128.0 million For the full fiscal year 2023, the Company currently expects: Total revenue of $750 million to $755 million, representing year-over-year growth of 36% to 37% Calculated billings of $905 million to $925 million, representing year-over-year growth of 37% to 40% Non-GAAP operating loss of $90 million to $80 million Non-GAAP net loss per share of $0.70 to $0.62, assuming basic and diluted weighted average shares outstanding of approximately 128.5 million Net free cash flow of negative $15 million to negative $10 million We have not reconciled net free cash flow guidance to net cash from operating activities because we do not provide guidance on the reconciling items between net cash from operating activities and net free cash flow, due to the uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items will have a significant impact on our net free cash flow. Accordingly, a reconciliation of net cash from operating activities to net free cash flow guidance is not available without unreasonable effort. We do not provide reconciliation of calculated billings guidance as its components are solely revenue and deferred revenue, and guidance for revenue is already provided. Conference Call Information Smartsheet will host a conference call and live webcast for analysts and investors at 1:30 p.m. Pacific Time on March 15, 2022. A live webcast and accompanying presentation can be accessed on the Investor Relations section of the Company's 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 US). The conference ID is 7672979. A replay of the call via webcast will be available at https://investors.smartsheet.com or by dialing (800) 770-2030 or +1 (647) 362-9199 (outside of the US). The dial-in replay will be available until the end of day on March 22, 2022. The webcast replay will be available for one year. 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 first fiscal quarter ending April 30, 2022 and the full fiscal year ending January 31, 2023, 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: the impact of the COVID-19 pandemic, 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 Annual Report on Form 10-K for the fiscal year ended January 31, 2022 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 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 are included within 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 loss as GAAP operating loss excluding share-based compensation expense, amortization of acquisition-related intangible assets, one-time costs associated with mergers and acquisitions, and litigation expenses and settlements related to matters that are outside the ordinary course of business. We define non-GAAP net loss as GAAP net loss excluding non-recurring income tax adjustments associated with mergers and acquisitions and the same exclusions that are used to derive non-GAAP operating loss. There are a number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net 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 net 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 net 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 and to make acquisitions. Net free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. 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 net free cash flow as compared to net cash from operating activities, including that net free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made. We define calculated billings as total revenue plus the change in deferred revenue in the period. Because we recognize subscription revenue ratably over the subscription term, calculated billings can be used to measure our subscription sales activity for a particular period, to compare subscription sales activity across particular periods, and as an indicator of future subscription revenue. Definitions of Business Metrics Average ACV per domain-based customer We define average ACV per domain-based customer as total outstanding ACV 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 ACV from the cohort of all customers as of the 12 months prior to such period end, or Prior Period ACV. We then calculate the ACV from these same customers as of the current period end, or Current Period ACV. Current Period ACV 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 ACV by the total Prior Period ACV to arrive at the dollar-based net retention rate. Any ACV 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. About Smartsheet Smartsheet (NYSE: SMAR) is the enterprise platform for dynamic work. By aligning people and technology so organizations can move faster and drive innovation, Smartsheet enables its millions of users to achieve more. 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 and Comprehensive Loss (in thousands, except per share data) (unaudited) Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 Revenue Subscription $ 145,655 $ 101,107 $ 507,375 $ 352,782 Professional services 11,731 8,764 43,457 32,731 Total revenue 157,386 109,871 550,832 385,513 Cost of revenue Subscription 22,305 17,480 77,460 59,374 Professional services 10,715 6,870 39,013 26,165 Total cost of revenue 33,020 24,350 116,473 85,539 Gross profit 124,366 85,521 434,359 299,974 Operating expenses Research and development 48,736 32,273 165,440 118,722 Sales and marketing 98,138 62,522 329,751 230,281 General and administrative 29,637 19,771 109,204 71,443 Total operating expenses 176,511 114,566 604,395 420,446 Loss from operations (52,145 ) (29,045 ) (170,036 ) (120,472 ) Interest income 13 11 48 1,444 Other income (expense), net (925 ) 401 (813 ) 296 Loss before income tax provision (benefit) (53,057 ) (28,633 ) (170,801 ) (118,732 ) Income tax provision (benefit) 82 32 296 (3,753 ) Net loss and comprehensive loss $ (53,139 ) $ (28,665 ) $ (171,097 ) $ (114,979 ) Net loss per share, basic and diluted $ (0.42 ) $ (0.23 ) $ (1.36 ) $ (0.95 ) Weighted-average shares outstanding used to compute net loss per share, basic and diluted 127,038 122,620 125,632 120,663 Share-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands, unaudited): Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 Cost of subscription revenue $ 1,548 $ 1,254 $ 6,274 $ 4,385 Cost of professional services revenue 1,140 571 3,788 2,146 Research and development 12,792 7,236 41,218 25,072 Sales and marketing 12,066 7,565 40,632 25,921 General and administrative 6,802 4,265 22,988 14,498 Total share-based compensation expense $ 34,348 $ 20,891 $ 114,900 $ 72,022 SMARTSHEET INC. Condensed Consolidated Balance Sheets (in thousands, except share data) (unaudited) January 31, 2022 2021 Assets Current assets Cash and cash equivalents $ 449,074 $ 442,200 Accounts receivable, net of allowances of $7,561 and $6,933, respectively 151,138 102,648 Prepaid expenses and other current assets 34,390 13,524 Total current assets 634,602 558,372 Long-term assets Restricted cash 17 18 Deferred commissions 91,312 60,529 Property and equipment, net 36,835 28,613 Operating lease right-of-use assets 67,171 81,081 Intangible assets, net 44,096 54,139 Goodwill 125,605 125,605 Other long-term assets 3,194 3,432 Total assets $ 1,002,832 $ 911,789 Liabilities and shareholders’ equity Current liabilities Accounts payable $ 1,506 $ 2,851 Accrued compensation and related benefits 66,744 47,861 Other accrued liabilities 18,901 17,263 Operating lease liabilities, current 18,003 17,059 Deferred revenue 332,285 222,689 Total current liabilities 437,439 307,723 Operating lease liabilities, non-current 58,237 71,925 Deferred revenue, non-current 2,377 1,308 Other long-term liabilities — 3,904 Total liabilities 498,053 384,860 Shareholders’ equity: Preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding as of January 31, 2022 and January 31, 2021 — — Class A common stock, no par value; 500,000,000 shares authorized, 127,809,525 shares issued and outstanding as of January 31, 2022; 500,000,000 shares authorized, 123,272,902 shares issued and outstanding as of January 31, 2021 — — Class B common stock, no par value; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2022; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2021 — — Additional paid-in capital 1,047,313 898,366 Accumulated deficit (542,534 ) (371,437 ) Total shareholders’ equity 504,779 526,929 Total liabilities and shareholders’ equity $ 1,002,832 $ 911,789 SMARTSHEET INC. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Year Ended January 31, 2022 2021 Cash flows from operating activities Net loss $ (171,097 ) $ (114,979 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation expense 114,900 71,750 Depreciation and amortization 21,765 17,255 Amortization of deferred commission costs 43,680 30,691 Unrealized foreign currency (gain) loss 1,048 (161 ) Loss on disposal of assets — 268 Non-cash operating lease costs 14,905 11,924 Changes in operating assets and liabilities: Accounts receivable (48,575 ) (43,112 ) Prepaid expenses and other current assets (19,884 ) (3,678 ) Other long-term assets 467 (5,819 ) Accounts payable (1,331 ) (4,915 ) Other accrued liabilities 1,950 5,543 Accrued compensation and related benefits 19,906 5,811 Deferred commissions (74,463 ) (42,965 ) Other long-term liabilities (3,904 ) 3,904 Deferred revenue 110,664 60,534 Operating lease liabilities (13,543 ) (7,699 ) Net cash used in operating activities (3,512 ) (15,648 ) Cash flows from investing activities Proceeds from early termination of short-term investments — 50,532 Purchases of long-term investments (1,000 ) — Purchases of property and equipment (10,563 ) (4,176 ) Proceeds from sale of property and equipment — 1,250 Capitalized internal-use software development costs (6,706 ) (7,608 ) Purchases of intangible assets (31 ) — Payments for business acquisitions, net of cash acquired — (125,055 ) Net cash used in investing activities (18,300 ) (85,057 ) Cash flows from financing activities Payments on principal of finance leases — (4,129 ) Payments of deferred offering costs — (59 ) Proceeds from exercise of stock options 19,132 17,373 Taxes paid related to net share settlement of restricted stock units (6,171 ) (2,150 ) Proceeds from Employee Stock Purchase Plan 17,380 14,758 Net cash provided by financing activities 30,341 25,793 Effects of changes in foreign currency exchange rates on cash, cash equivalents, and restricted cash (1,197 ) 471 Net increase (decrease) in cash, cash equivalents, and restricted cash 7,332 (74,441 ) Cash, cash equivalents, and restricted cash at beginning of period 442,348 516,789 Cash, cash equivalents, and restricted cash at end of period $ 449,680 $ 442,348 Supplemental disclosures Cash paid for interest $ — $ 114 Cash paid for income taxes 196 168 Right-of-use assets obtained in exchange for operating lease liabilities 994 35,415 Accrued purchases of property and equipment (including internal-use software) 1,164 1,080 Share-based compensation capitalized in internal-use software development costs 1,970 1,986 Fair value of shares issued as consideration for acquisition — 25,872 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from GAAP to non-GAAP operating loss and operating margin Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (dollars in thousands) Loss from operations $ (52,145 ) $ (29,045 ) $ (170,036 ) $ (120,472 ) Add: Share-based compensation expense(1) 35,152 20,891 115,704 72,022 Amortization of acquisition-related intangible assets(2) 2,508 2,791 10,059 6,266 One-time acquisition costs 10 77 27 977 Litigation expenses and settlements(3) — — 10,000 — Non-GAAP operating loss $ (14,475 ) $ (5,286 ) $ (34,246 ) $ (41,207 ) Operating margin (33 )% (26 )% (31 )% (31 )% Non-GAAP operating margin (9 )% (5 )% (6 )% (11 )% (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. (3) Relates to matters that are outside the ordinary course of our business. Reconciliation from GAAP to non-GAAP net loss Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Net loss $ (53,139 ) $ (28,665 ) $ (171,097 ) $ (114,979 ) Add: Share-based compensation expense(1) 35,152 20,891 115,704 72,022 Amortization of acquisition-related intangible assets(2) 2,508 2,791 10,059 6,266 One-time acquisition costs 10 77 27 977 Litigation expenses and settlements(3) — — 10,000 — Release of valuation allowance(4) — — — (4,014 ) Non-GAAP net loss $ (15,469 ) $ (4,906 ) $ (35,307 ) $ (39,728 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. (3) Relates to matters that are outside the ordinary course of our business. (4) Relates to a non-recurring income tax adjustment associated with the Brandfolder acquisition. Anti-dilutive shares (in thousands) January 31, 2022 2021 Shares subject to outstanding common stock awards 11,855 11,299 Shares issuable pursuant to the Employee Stock Purchase Plan 52 162 Total potentially dilutive shares 11,907 11,461 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from net operating cash flow to net free cash flow Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ (152 ) $ 15,204 $ (3,512 ) $ (15,648 ) Less: Purchases of property and equipment (1,394 ) (1,513 ) (10,563 ) (4,176 ) Capitalized internal-use software development costs (1,197 ) (1,635 ) (6,706 ) (7,608 ) Payments on principal of finance leases — (2,156 ) — (4,129 ) Free cash flow $ (2,743 ) $ 9,900 $ (20,781 ) $ (31,561 ) Reconciliation from revenue to calculated billings Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Total revenue $ 157,386 $ 109,871 $ 550,832 $ 385,513 Add: Deferred revenue (end of period) 334,662 223,997 334,662 223,997 Less: Deferred revenue (beginning of period) 267,748 182,683 223,997 158,809 Calculated billings $ 224,300 $ 151,185 $ 661,497 $ 450,701 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from GAAP to non-GAAP operating loss guidance Q1 FY 2023 FY 2023 Low High Low High (in millions) Loss from operations $ (75.5 ) $ (73.5 ) $ (301.0 ) $ (291.0 ) Add: Share-based compensation expense(1) 48.0 48.0 201.0 201.0 Amortization of acquisition-related intangible assets(2) 2.5 2.5 10.0 10.0 Non-GAAP operating loss $ (25.0 ) $ (23.0 ) $ (90.0 ) $ (80.0 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. Reconciliation from GAAP to non-GAAP net loss guidance Q1 FY 2023 FY 2023 Low High Low High (in millions) Net loss $ (75.5 ) $ (73.5 ) $ (301.0 ) $ (291.0 ) Add: Share-based compensation expense(1) 48.0 48.0 201.0 201.0 Amortization of acquisition-related intangible assets(2) 2.5 2.5 10.0 10.0 Non-GAAP net loss $ (25.0 ) $ (23.0 ) $ (90.0 ) $ (80.0 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. View source version on businesswire.com: https://www.businesswire.com/news/home/20220315006072/en/Contacts Smartsheet Inc. 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Smartsheet Inc. Announces Fourth Quarter and Full Fiscal Year 2022 Results By: Smartsheet Inc. via Business Wire March 15, 2022 at 16:05 PM EDT Fourth quarter total revenue grew 43% year over year to $157.4 million Fourth quarter calculated billings grew 48% year over year to $224.3 million Fourth quarter net operating cash flow was negative $0.2 million, net free cash flow was negative $2.7 million Smartsheet Inc. (NYSE: SMAR), the enterprise platform for dynamic work, today announced financial results for its fourth fiscal quarter ended January 31, 2022. "Our results this quarter cap off an incredible fiscal year at Smartsheet,” said Mark Mader, President and CEO of Smartsheet. “We once again set new quarterly records for large deals and accelerated annual billings growth. Our momentum has never been stronger. We enter FY23 with a growing team that is focused on delivering the market-leading innovation that is increasingly vital for our customers. The global work management market is thriving, and customers are choosing Smartsheet in record numbers." Fourth Quarter Fiscal 2022 Financial Highlights Revenue: Total revenue was $157.4 million, an increase of 43% year over year. Subscription revenue was $145.7 million, an increase of 44% year over year. Professional services revenue was $11.7 million, an increase of 34% year over year. Operating Loss: GAAP operating loss was $52.1 million, or 33% of total revenue, compared to GAAP operating loss of $29.0 million, or 26% of total revenue, in the fourth quarter of fiscal 2021. Non-GAAP operating loss was $14.5 million, or 9% of total revenue, compared to non-GAAP operating loss of $5.3 million, or 5% of total revenue, in the fourth quarter of fiscal 2021. Net Loss: GAAP net loss was $53.1 million, compared to GAAP net loss of $28.7 million in the fourth quarter of fiscal 2021. GAAP net loss per share was $0.42, compared to GAAP net loss per share of $0.23 in the fourth quarter of fiscal 2021. Non-GAAP net loss was $15.5 million, compared to non-GAAP net loss of $4.9 million in the fourth quarter of fiscal 2021. Non-GAAP net loss per share was $0.12, compared to non-GAAP net loss per share of $0.04 in the fourth quarter of fiscal 2021. Cash Flow: Net operating cash flow was negative $0.2 million, compared to net operating cash flow of positive $15.2 million in the fourth quarter of fiscal 2021. Net free cash flow was negative $2.7 million, compared to positive $9.9 million in the fourth quarter of fiscal 2021. Fiscal Year 2022 Financial Highlights Revenue: Total revenue was $550.8 million, an increase of 43% year over year. Subscription revenue was $507.4 million, an increase of 44% year over year. Professional services revenue was $43.5 million, an increase of 33% year over year. Operating Loss: GAAP operating loss was $170.0 million, or 31% of total revenue, compared to GAAP operating loss of $120.5 million, or 31% of total revenue, in fiscal 2021. Non-GAAP operating loss was $34.2 million, or 6% of total revenue, compared to non-GAAP operating loss of $41.2 million, or 11% of total revenue, in fiscal 2021. Net Loss: GAAP net loss was $171.1 million, compared to $115.0 million in fiscal 2021. GAAP net loss per share was $1.36, compared to GAAP net loss per share of $0.95 in fiscal 2021. Non-GAAP net loss was $35.3 million, compared to non-GAAP net loss of $39.7 million in fiscal 2021. Non-GAAP net loss per share was $0.28, compared to non-GAAP net loss per share of $0.33 in fiscal 2021. Cash Flow: Net operating cash flow was negative $3.5 million, compared to net operating cash flow of negative $15.6 million in fiscal 2021. Net free cash flow was negative $20.8 million, compared to negative $31.6 million in fiscal 2021. Fiscal Year 2022 Business Highlights Ended the year with a dollar-based net retention rate of 134%, an increase from 123% at the end of fiscal year 2021 The number of all customers with annualized contract values ("ACV") of $100,000 or more grew to 1,026, an increase of 74% year over year The number of all customers with ACV of $50,000 or more grew to 2,354, an increase of 55% year over year The number of all customers with ACV of $5,000 or more grew to 15,150, an increase of 28% year over year Average ACV per domain-based customer increased to $6,977, an increase of 37% year over year Ended the year with 2,539 employees, up 624 from the end of fiscal year 2021 Introduced Smartsheet Advance, a tiered premium offering to unlock the full potential of Smartsheet’s platform for customers as they scale Introduced Pro Plan, our updated entry-level plan, allowing new customers to get started in a more collaborative and cost-efficient way Launched Smartsheet Regions, with the first region in the European Union, giving global organizations more control over where they host their Smartsheet content Enhanced Smartsheet’s enterprise-grade security and governance by introducing Enterprise Plan Manager, customer managed encryption keys, and expanded data retention controls Released Work Insights, a new capability that automatically aggregates customers’ data and visualizes it to help uncover key trends, activities, and bottlenecks Unified Smartsheet’s Resource Management tool with the core Smartsheet platform so customers can access their resourcing plans directly from their project sheets Expanded Smartsheet’s ecosystem, including new integrations with Webex, Lucidspark, and HubSpot and new partnerships with McAfee and UiPath Smartsheet and Brandfolder were recognized as leaders on G2’s Grid for Project and Portfolio Management Software and Grid for Digital Asset Management Software, respectively 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 Business Metrics" contains definitions of certain non-financial metrics provided within this earnings release. Financial Outlook For the first quarter of fiscal year 2023, the Company currently expects: Total revenue of $162 million to $163 million, representing year-over-year growth of 38% to 39% Non-GAAP operating loss of $25 million to $23 million Non-GAAP net loss per share of $0.20 to $0.18, assuming basic and diluted weighted average shares outstanding of approximately 128.0 million For the full fiscal year 2023, the Company currently expects: Total revenue of $750 million to $755 million, representing year-over-year growth of 36% to 37% Calculated billings of $905 million to $925 million, representing year-over-year growth of 37% to 40% Non-GAAP operating loss of $90 million to $80 million Non-GAAP net loss per share of $0.70 to $0.62, assuming basic and diluted weighted average shares outstanding of approximately 128.5 million Net free cash flow of negative $15 million to negative $10 million We have not reconciled net free cash flow guidance to net cash from operating activities because we do not provide guidance on the reconciling items between net cash from operating activities and net free cash flow, due to the uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items will have a significant impact on our net free cash flow. Accordingly, a reconciliation of net cash from operating activities to net free cash flow guidance is not available without unreasonable effort. We do not provide reconciliation of calculated billings guidance as its components are solely revenue and deferred revenue, and guidance for revenue is already provided. Conference Call Information Smartsheet will host a conference call and live webcast for analysts and investors at 1:30 p.m. Pacific Time on March 15, 2022. A live webcast and accompanying presentation can be accessed on the Investor Relations section of the Company's 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 US). The conference ID is 7672979. A replay of the call via webcast will be available at https://investors.smartsheet.com or by dialing (800) 770-2030 or +1 (647) 362-9199 (outside of the US). The dial-in replay will be available until the end of day on March 22, 2022. The webcast replay will be available for one year. 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 first fiscal quarter ending April 30, 2022 and the full fiscal year ending January 31, 2023, 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: the impact of the COVID-19 pandemic, 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 Annual Report on Form 10-K for the fiscal year ended January 31, 2022 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 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 are included within 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 loss as GAAP operating loss excluding share-based compensation expense, amortization of acquisition-related intangible assets, one-time costs associated with mergers and acquisitions, and litigation expenses and settlements related to matters that are outside the ordinary course of business. We define non-GAAP net loss as GAAP net loss excluding non-recurring income tax adjustments associated with mergers and acquisitions and the same exclusions that are used to derive non-GAAP operating loss. There are a number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net 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 net 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 net 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 and to make acquisitions. Net free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. 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 net free cash flow as compared to net cash from operating activities, including that net free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made. We define calculated billings as total revenue plus the change in deferred revenue in the period. Because we recognize subscription revenue ratably over the subscription term, calculated billings can be used to measure our subscription sales activity for a particular period, to compare subscription sales activity across particular periods, and as an indicator of future subscription revenue. Definitions of Business Metrics Average ACV per domain-based customer We define average ACV per domain-based customer as total outstanding ACV 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 ACV from the cohort of all customers as of the 12 months prior to such period end, or Prior Period ACV. We then calculate the ACV from these same customers as of the current period end, or Current Period ACV. Current Period ACV 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 ACV by the total Prior Period ACV to arrive at the dollar-based net retention rate. Any ACV 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. About Smartsheet Smartsheet (NYSE: SMAR) is the enterprise platform for dynamic work. By aligning people and technology so organizations can move faster and drive innovation, Smartsheet enables its millions of users to achieve more. 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 and Comprehensive Loss (in thousands, except per share data) (unaudited) Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 Revenue Subscription $ 145,655 $ 101,107 $ 507,375 $ 352,782 Professional services 11,731 8,764 43,457 32,731 Total revenue 157,386 109,871 550,832 385,513 Cost of revenue Subscription 22,305 17,480 77,460 59,374 Professional services 10,715 6,870 39,013 26,165 Total cost of revenue 33,020 24,350 116,473 85,539 Gross profit 124,366 85,521 434,359 299,974 Operating expenses Research and development 48,736 32,273 165,440 118,722 Sales and marketing 98,138 62,522 329,751 230,281 General and administrative 29,637 19,771 109,204 71,443 Total operating expenses 176,511 114,566 604,395 420,446 Loss from operations (52,145 ) (29,045 ) (170,036 ) (120,472 ) Interest income 13 11 48 1,444 Other income (expense), net (925 ) 401 (813 ) 296 Loss before income tax provision (benefit) (53,057 ) (28,633 ) (170,801 ) (118,732 ) Income tax provision (benefit) 82 32 296 (3,753 ) Net loss and comprehensive loss $ (53,139 ) $ (28,665 ) $ (171,097 ) $ (114,979 ) Net loss per share, basic and diluted $ (0.42 ) $ (0.23 ) $ (1.36 ) $ (0.95 ) Weighted-average shares outstanding used to compute net loss per share, basic and diluted 127,038 122,620 125,632 120,663 Share-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands, unaudited): Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 Cost of subscription revenue $ 1,548 $ 1,254 $ 6,274 $ 4,385 Cost of professional services revenue 1,140 571 3,788 2,146 Research and development 12,792 7,236 41,218 25,072 Sales and marketing 12,066 7,565 40,632 25,921 General and administrative 6,802 4,265 22,988 14,498 Total share-based compensation expense $ 34,348 $ 20,891 $ 114,900 $ 72,022 SMARTSHEET INC. Condensed Consolidated Balance Sheets (in thousands, except share data) (unaudited) January 31, 2022 2021 Assets Current assets Cash and cash equivalents $ 449,074 $ 442,200 Accounts receivable, net of allowances of $7,561 and $6,933, respectively 151,138 102,648 Prepaid expenses and other current assets 34,390 13,524 Total current assets 634,602 558,372 Long-term assets Restricted cash 17 18 Deferred commissions 91,312 60,529 Property and equipment, net 36,835 28,613 Operating lease right-of-use assets 67,171 81,081 Intangible assets, net 44,096 54,139 Goodwill 125,605 125,605 Other long-term assets 3,194 3,432 Total assets $ 1,002,832 $ 911,789 Liabilities and shareholders’ equity Current liabilities Accounts payable $ 1,506 $ 2,851 Accrued compensation and related benefits 66,744 47,861 Other accrued liabilities 18,901 17,263 Operating lease liabilities, current 18,003 17,059 Deferred revenue 332,285 222,689 Total current liabilities 437,439 307,723 Operating lease liabilities, non-current 58,237 71,925 Deferred revenue, non-current 2,377 1,308 Other long-term liabilities — 3,904 Total liabilities 498,053 384,860 Shareholders’ equity: Preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding as of January 31, 2022 and January 31, 2021 — — Class A common stock, no par value; 500,000,000 shares authorized, 127,809,525 shares issued and outstanding as of January 31, 2022; 500,000,000 shares authorized, 123,272,902 shares issued and outstanding as of January 31, 2021 — — Class B common stock, no par value; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2022; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2021 — — Additional paid-in capital 1,047,313 898,366 Accumulated deficit (542,534 ) (371,437 ) Total shareholders’ equity 504,779 526,929 Total liabilities and shareholders’ equity $ 1,002,832 $ 911,789 SMARTSHEET INC. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Year Ended January 31, 2022 2021 Cash flows from operating activities Net loss $ (171,097 ) $ (114,979 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation expense 114,900 71,750 Depreciation and amortization 21,765 17,255 Amortization of deferred commission costs 43,680 30,691 Unrealized foreign currency (gain) loss 1,048 (161 ) Loss on disposal of assets — 268 Non-cash operating lease costs 14,905 11,924 Changes in operating assets and liabilities: Accounts receivable (48,575 ) (43,112 ) Prepaid expenses and other current assets (19,884 ) (3,678 ) Other long-term assets 467 (5,819 ) Accounts payable (1,331 ) (4,915 ) Other accrued liabilities 1,950 5,543 Accrued compensation and related benefits 19,906 5,811 Deferred commissions (74,463 ) (42,965 ) Other long-term liabilities (3,904 ) 3,904 Deferred revenue 110,664 60,534 Operating lease liabilities (13,543 ) (7,699 ) Net cash used in operating activities (3,512 ) (15,648 ) Cash flows from investing activities Proceeds from early termination of short-term investments — 50,532 Purchases of long-term investments (1,000 ) — Purchases of property and equipment (10,563 ) (4,176 ) Proceeds from sale of property and equipment — 1,250 Capitalized internal-use software development costs (6,706 ) (7,608 ) Purchases of intangible assets (31 ) — Payments for business acquisitions, net of cash acquired — (125,055 ) Net cash used in investing activities (18,300 ) (85,057 ) Cash flows from financing activities Payments on principal of finance leases — (4,129 ) Payments of deferred offering costs — (59 ) Proceeds from exercise of stock options 19,132 17,373 Taxes paid related to net share settlement of restricted stock units (6,171 ) (2,150 ) Proceeds from Employee Stock Purchase Plan 17,380 14,758 Net cash provided by financing activities 30,341 25,793 Effects of changes in foreign currency exchange rates on cash, cash equivalents, and restricted cash (1,197 ) 471 Net increase (decrease) in cash, cash equivalents, and restricted cash 7,332 (74,441 ) Cash, cash equivalents, and restricted cash at beginning of period 442,348 516,789 Cash, cash equivalents, and restricted cash at end of period $ 449,680 $ 442,348 Supplemental disclosures Cash paid for interest $ — $ 114 Cash paid for income taxes 196 168 Right-of-use assets obtained in exchange for operating lease liabilities 994 35,415 Accrued purchases of property and equipment (including internal-use software) 1,164 1,080 Share-based compensation capitalized in internal-use software development costs 1,970 1,986 Fair value of shares issued as consideration for acquisition — 25,872 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from GAAP to non-GAAP operating loss and operating margin Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (dollars in thousands) Loss from operations $ (52,145 ) $ (29,045 ) $ (170,036 ) $ (120,472 ) Add: Share-based compensation expense(1) 35,152 20,891 115,704 72,022 Amortization of acquisition-related intangible assets(2) 2,508 2,791 10,059 6,266 One-time acquisition costs 10 77 27 977 Litigation expenses and settlements(3) — — 10,000 — Non-GAAP operating loss $ (14,475 ) $ (5,286 ) $ (34,246 ) $ (41,207 ) Operating margin (33 )% (26 )% (31 )% (31 )% Non-GAAP operating margin (9 )% (5 )% (6 )% (11 )% (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. (3) Relates to matters that are outside the ordinary course of our business. Reconciliation from GAAP to non-GAAP net loss Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Net loss $ (53,139 ) $ (28,665 ) $ (171,097 ) $ (114,979 ) Add: Share-based compensation expense(1) 35,152 20,891 115,704 72,022 Amortization of acquisition-related intangible assets(2) 2,508 2,791 10,059 6,266 One-time acquisition costs 10 77 27 977 Litigation expenses and settlements(3) — — 10,000 — Release of valuation allowance(4) — — — (4,014 ) Non-GAAP net loss $ (15,469 ) $ (4,906 ) $ (35,307 ) $ (39,728 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. (3) Relates to matters that are outside the ordinary course of our business. (4) Relates to a non-recurring income tax adjustment associated with the Brandfolder acquisition. Anti-dilutive shares (in thousands) January 31, 2022 2021 Shares subject to outstanding common stock awards 11,855 11,299 Shares issuable pursuant to the Employee Stock Purchase Plan 52 162 Total potentially dilutive shares 11,907 11,461 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from net operating cash flow to net free cash flow Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ (152 ) $ 15,204 $ (3,512 ) $ (15,648 ) Less: Purchases of property and equipment (1,394 ) (1,513 ) (10,563 ) (4,176 ) Capitalized internal-use software development costs (1,197 ) (1,635 ) (6,706 ) (7,608 ) Payments on principal of finance leases — (2,156 ) — (4,129 ) Free cash flow $ (2,743 ) $ 9,900 $ (20,781 ) $ (31,561 ) Reconciliation from revenue to calculated billings Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Total revenue $ 157,386 $ 109,871 $ 550,832 $ 385,513 Add: Deferred revenue (end of period) 334,662 223,997 334,662 223,997 Less: Deferred revenue (beginning of period) 267,748 182,683 223,997 158,809 Calculated billings $ 224,300 $ 151,185 $ 661,497 $ 450,701 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from GAAP to non-GAAP operating loss guidance Q1 FY 2023 FY 2023 Low High Low High (in millions) Loss from operations $ (75.5 ) $ (73.5 ) $ (301.0 ) $ (291.0 ) Add: Share-based compensation expense(1) 48.0 48.0 201.0 201.0 Amortization of acquisition-related intangible assets(2) 2.5 2.5 10.0 10.0 Non-GAAP operating loss $ (25.0 ) $ (23.0 ) $ (90.0 ) $ (80.0 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. Reconciliation from GAAP to non-GAAP net loss guidance Q1 FY 2023 FY 2023 Low High Low High (in millions) Net loss $ (75.5 ) $ (73.5 ) $ (301.0 ) $ (291.0 ) Add: Share-based compensation expense(1) 48.0 48.0 201.0 201.0 Amortization of acquisition-related intangible assets(2) 2.5 2.5 10.0 10.0 Non-GAAP net loss $ (25.0 ) $ (23.0 ) $ (90.0 ) $ (80.0 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. View source version on businesswire.com: https://www.businesswire.com/news/home/20220315006072/en/Contacts Smartsheet Inc. Investor Relations Contact Aaron Turner investorrelations@smartsheet.com Media Contact Chrissy Vaughn pr@smartsheet.com
Fourth quarter total revenue grew 43% year over year to $157.4 million Fourth quarter calculated billings grew 48% year over year to $224.3 million Fourth quarter net operating cash flow was negative $0.2 million, net free cash flow was negative $2.7 million
Smartsheet Inc. (NYSE: SMAR), the enterprise platform for dynamic work, today announced financial results for its fourth fiscal quarter ended January 31, 2022. "Our results this quarter cap off an incredible fiscal year at Smartsheet,” said Mark Mader, President and CEO of Smartsheet. “We once again set new quarterly records for large deals and accelerated annual billings growth. Our momentum has never been stronger. We enter FY23 with a growing team that is focused on delivering the market-leading innovation that is increasingly vital for our customers. The global work management market is thriving, and customers are choosing Smartsheet in record numbers." Fourth Quarter Fiscal 2022 Financial Highlights Revenue: Total revenue was $157.4 million, an increase of 43% year over year. Subscription revenue was $145.7 million, an increase of 44% year over year. Professional services revenue was $11.7 million, an increase of 34% year over year. Operating Loss: GAAP operating loss was $52.1 million, or 33% of total revenue, compared to GAAP operating loss of $29.0 million, or 26% of total revenue, in the fourth quarter of fiscal 2021. Non-GAAP operating loss was $14.5 million, or 9% of total revenue, compared to non-GAAP operating loss of $5.3 million, or 5% of total revenue, in the fourth quarter of fiscal 2021. Net Loss: GAAP net loss was $53.1 million, compared to GAAP net loss of $28.7 million in the fourth quarter of fiscal 2021. GAAP net loss per share was $0.42, compared to GAAP net loss per share of $0.23 in the fourth quarter of fiscal 2021. Non-GAAP net loss was $15.5 million, compared to non-GAAP net loss of $4.9 million in the fourth quarter of fiscal 2021. Non-GAAP net loss per share was $0.12, compared to non-GAAP net loss per share of $0.04 in the fourth quarter of fiscal 2021. Cash Flow: Net operating cash flow was negative $0.2 million, compared to net operating cash flow of positive $15.2 million in the fourth quarter of fiscal 2021. Net free cash flow was negative $2.7 million, compared to positive $9.9 million in the fourth quarter of fiscal 2021. Fiscal Year 2022 Financial Highlights Revenue: Total revenue was $550.8 million, an increase of 43% year over year. Subscription revenue was $507.4 million, an increase of 44% year over year. Professional services revenue was $43.5 million, an increase of 33% year over year. Operating Loss: GAAP operating loss was $170.0 million, or 31% of total revenue, compared to GAAP operating loss of $120.5 million, or 31% of total revenue, in fiscal 2021. Non-GAAP operating loss was $34.2 million, or 6% of total revenue, compared to non-GAAP operating loss of $41.2 million, or 11% of total revenue, in fiscal 2021. Net Loss: GAAP net loss was $171.1 million, compared to $115.0 million in fiscal 2021. GAAP net loss per share was $1.36, compared to GAAP net loss per share of $0.95 in fiscal 2021. Non-GAAP net loss was $35.3 million, compared to non-GAAP net loss of $39.7 million in fiscal 2021. Non-GAAP net loss per share was $0.28, compared to non-GAAP net loss per share of $0.33 in fiscal 2021. Cash Flow: Net operating cash flow was negative $3.5 million, compared to net operating cash flow of negative $15.6 million in fiscal 2021. Net free cash flow was negative $20.8 million, compared to negative $31.6 million in fiscal 2021. Fiscal Year 2022 Business Highlights Ended the year with a dollar-based net retention rate of 134%, an increase from 123% at the end of fiscal year 2021 The number of all customers with annualized contract values ("ACV") of $100,000 or more grew to 1,026, an increase of 74% year over year The number of all customers with ACV of $50,000 or more grew to 2,354, an increase of 55% year over year The number of all customers with ACV of $5,000 or more grew to 15,150, an increase of 28% year over year Average ACV per domain-based customer increased to $6,977, an increase of 37% year over year Ended the year with 2,539 employees, up 624 from the end of fiscal year 2021 Introduced Smartsheet Advance, a tiered premium offering to unlock the full potential of Smartsheet’s platform for customers as they scale Introduced Pro Plan, our updated entry-level plan, allowing new customers to get started in a more collaborative and cost-efficient way Launched Smartsheet Regions, with the first region in the European Union, giving global organizations more control over where they host their Smartsheet content Enhanced Smartsheet’s enterprise-grade security and governance by introducing Enterprise Plan Manager, customer managed encryption keys, and expanded data retention controls Released Work Insights, a new capability that automatically aggregates customers’ data and visualizes it to help uncover key trends, activities, and bottlenecks Unified Smartsheet’s Resource Management tool with the core Smartsheet platform so customers can access their resourcing plans directly from their project sheets Expanded Smartsheet’s ecosystem, including new integrations with Webex, Lucidspark, and HubSpot and new partnerships with McAfee and UiPath Smartsheet and Brandfolder were recognized as leaders on G2’s Grid for Project and Portfolio Management Software and Grid for Digital Asset Management Software, respectively 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 Business Metrics" contains definitions of certain non-financial metrics provided within this earnings release. Financial Outlook For the first quarter of fiscal year 2023, the Company currently expects: Total revenue of $162 million to $163 million, representing year-over-year growth of 38% to 39% Non-GAAP operating loss of $25 million to $23 million Non-GAAP net loss per share of $0.20 to $0.18, assuming basic and diluted weighted average shares outstanding of approximately 128.0 million For the full fiscal year 2023, the Company currently expects: Total revenue of $750 million to $755 million, representing year-over-year growth of 36% to 37% Calculated billings of $905 million to $925 million, representing year-over-year growth of 37% to 40% Non-GAAP operating loss of $90 million to $80 million Non-GAAP net loss per share of $0.70 to $0.62, assuming basic and diluted weighted average shares outstanding of approximately 128.5 million Net free cash flow of negative $15 million to negative $10 million We have not reconciled net free cash flow guidance to net cash from operating activities because we do not provide guidance on the reconciling items between net cash from operating activities and net free cash flow, due to the uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items will have a significant impact on our net free cash flow. Accordingly, a reconciliation of net cash from operating activities to net free cash flow guidance is not available without unreasonable effort. We do not provide reconciliation of calculated billings guidance as its components are solely revenue and deferred revenue, and guidance for revenue is already provided. Conference Call Information Smartsheet will host a conference call and live webcast for analysts and investors at 1:30 p.m. Pacific Time on March 15, 2022. A live webcast and accompanying presentation can be accessed on the Investor Relations section of the Company's 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 US). The conference ID is 7672979. A replay of the call via webcast will be available at https://investors.smartsheet.com or by dialing (800) 770-2030 or +1 (647) 362-9199 (outside of the US). The dial-in replay will be available until the end of day on March 22, 2022. The webcast replay will be available for one year. 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 first fiscal quarter ending April 30, 2022 and the full fiscal year ending January 31, 2023, 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: the impact of the COVID-19 pandemic, 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 Annual Report on Form 10-K for the fiscal year ended January 31, 2022 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 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 are included within 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 loss as GAAP operating loss excluding share-based compensation expense, amortization of acquisition-related intangible assets, one-time costs associated with mergers and acquisitions, and litigation expenses and settlements related to matters that are outside the ordinary course of business. We define non-GAAP net loss as GAAP net loss excluding non-recurring income tax adjustments associated with mergers and acquisitions and the same exclusions that are used to derive non-GAAP operating loss. There are a number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net 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 net 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 net 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 and to make acquisitions. Net free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. 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 net free cash flow as compared to net cash from operating activities, including that net free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made. We define calculated billings as total revenue plus the change in deferred revenue in the period. Because we recognize subscription revenue ratably over the subscription term, calculated billings can be used to measure our subscription sales activity for a particular period, to compare subscription sales activity across particular periods, and as an indicator of future subscription revenue. Definitions of Business Metrics Average ACV per domain-based customer We define average ACV per domain-based customer as total outstanding ACV 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 ACV from the cohort of all customers as of the 12 months prior to such period end, or Prior Period ACV. We then calculate the ACV from these same customers as of the current period end, or Current Period ACV. Current Period ACV 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 ACV by the total Prior Period ACV to arrive at the dollar-based net retention rate. Any ACV 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. About Smartsheet Smartsheet (NYSE: SMAR) is the enterprise platform for dynamic work. By aligning people and technology so organizations can move faster and drive innovation, Smartsheet enables its millions of users to achieve more. 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 and Comprehensive Loss (in thousands, except per share data) (unaudited) Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 Revenue Subscription $ 145,655 $ 101,107 $ 507,375 $ 352,782 Professional services 11,731 8,764 43,457 32,731 Total revenue 157,386 109,871 550,832 385,513 Cost of revenue Subscription 22,305 17,480 77,460 59,374 Professional services 10,715 6,870 39,013 26,165 Total cost of revenue 33,020 24,350 116,473 85,539 Gross profit 124,366 85,521 434,359 299,974 Operating expenses Research and development 48,736 32,273 165,440 118,722 Sales and marketing 98,138 62,522 329,751 230,281 General and administrative 29,637 19,771 109,204 71,443 Total operating expenses 176,511 114,566 604,395 420,446 Loss from operations (52,145 ) (29,045 ) (170,036 ) (120,472 ) Interest income 13 11 48 1,444 Other income (expense), net (925 ) 401 (813 ) 296 Loss before income tax provision (benefit) (53,057 ) (28,633 ) (170,801 ) (118,732 ) Income tax provision (benefit) 82 32 296 (3,753 ) Net loss and comprehensive loss $ (53,139 ) $ (28,665 ) $ (171,097 ) $ (114,979 ) Net loss per share, basic and diluted $ (0.42 ) $ (0.23 ) $ (1.36 ) $ (0.95 ) Weighted-average shares outstanding used to compute net loss per share, basic and diluted 127,038 122,620 125,632 120,663 Share-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands, unaudited): Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 Cost of subscription revenue $ 1,548 $ 1,254 $ 6,274 $ 4,385 Cost of professional services revenue 1,140 571 3,788 2,146 Research and development 12,792 7,236 41,218 25,072 Sales and marketing 12,066 7,565 40,632 25,921 General and administrative 6,802 4,265 22,988 14,498 Total share-based compensation expense $ 34,348 $ 20,891 $ 114,900 $ 72,022 SMARTSHEET INC. Condensed Consolidated Balance Sheets (in thousands, except share data) (unaudited) January 31, 2022 2021 Assets Current assets Cash and cash equivalents $ 449,074 $ 442,200 Accounts receivable, net of allowances of $7,561 and $6,933, respectively 151,138 102,648 Prepaid expenses and other current assets 34,390 13,524 Total current assets 634,602 558,372 Long-term assets Restricted cash 17 18 Deferred commissions 91,312 60,529 Property and equipment, net 36,835 28,613 Operating lease right-of-use assets 67,171 81,081 Intangible assets, net 44,096 54,139 Goodwill 125,605 125,605 Other long-term assets 3,194 3,432 Total assets $ 1,002,832 $ 911,789 Liabilities and shareholders’ equity Current liabilities Accounts payable $ 1,506 $ 2,851 Accrued compensation and related benefits 66,744 47,861 Other accrued liabilities 18,901 17,263 Operating lease liabilities, current 18,003 17,059 Deferred revenue 332,285 222,689 Total current liabilities 437,439 307,723 Operating lease liabilities, non-current 58,237 71,925 Deferred revenue, non-current 2,377 1,308 Other long-term liabilities — 3,904 Total liabilities 498,053 384,860 Shareholders’ equity: Preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding as of January 31, 2022 and January 31, 2021 — — Class A common stock, no par value; 500,000,000 shares authorized, 127,809,525 shares issued and outstanding as of January 31, 2022; 500,000,000 shares authorized, 123,272,902 shares issued and outstanding as of January 31, 2021 — — Class B common stock, no par value; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2022; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2021 — — Additional paid-in capital 1,047,313 898,366 Accumulated deficit (542,534 ) (371,437 ) Total shareholders’ equity 504,779 526,929 Total liabilities and shareholders’ equity $ 1,002,832 $ 911,789 SMARTSHEET INC. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Year Ended January 31, 2022 2021 Cash flows from operating activities Net loss $ (171,097 ) $ (114,979 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation expense 114,900 71,750 Depreciation and amortization 21,765 17,255 Amortization of deferred commission costs 43,680 30,691 Unrealized foreign currency (gain) loss 1,048 (161 ) Loss on disposal of assets — 268 Non-cash operating lease costs 14,905 11,924 Changes in operating assets and liabilities: Accounts receivable (48,575 ) (43,112 ) Prepaid expenses and other current assets (19,884 ) (3,678 ) Other long-term assets 467 (5,819 ) Accounts payable (1,331 ) (4,915 ) Other accrued liabilities 1,950 5,543 Accrued compensation and related benefits 19,906 5,811 Deferred commissions (74,463 ) (42,965 ) Other long-term liabilities (3,904 ) 3,904 Deferred revenue 110,664 60,534 Operating lease liabilities (13,543 ) (7,699 ) Net cash used in operating activities (3,512 ) (15,648 ) Cash flows from investing activities Proceeds from early termination of short-term investments — 50,532 Purchases of long-term investments (1,000 ) — Purchases of property and equipment (10,563 ) (4,176 ) Proceeds from sale of property and equipment — 1,250 Capitalized internal-use software development costs (6,706 ) (7,608 ) Purchases of intangible assets (31 ) — Payments for business acquisitions, net of cash acquired — (125,055 ) Net cash used in investing activities (18,300 ) (85,057 ) Cash flows from financing activities Payments on principal of finance leases — (4,129 ) Payments of deferred offering costs — (59 ) Proceeds from exercise of stock options 19,132 17,373 Taxes paid related to net share settlement of restricted stock units (6,171 ) (2,150 ) Proceeds from Employee Stock Purchase Plan 17,380 14,758 Net cash provided by financing activities 30,341 25,793 Effects of changes in foreign currency exchange rates on cash, cash equivalents, and restricted cash (1,197 ) 471 Net increase (decrease) in cash, cash equivalents, and restricted cash 7,332 (74,441 ) Cash, cash equivalents, and restricted cash at beginning of period 442,348 516,789 Cash, cash equivalents, and restricted cash at end of period $ 449,680 $ 442,348 Supplemental disclosures Cash paid for interest $ — $ 114 Cash paid for income taxes 196 168 Right-of-use assets obtained in exchange for operating lease liabilities 994 35,415 Accrued purchases of property and equipment (including internal-use software) 1,164 1,080 Share-based compensation capitalized in internal-use software development costs 1,970 1,986 Fair value of shares issued as consideration for acquisition — 25,872 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from GAAP to non-GAAP operating loss and operating margin Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (dollars in thousands) Loss from operations $ (52,145 ) $ (29,045 ) $ (170,036 ) $ (120,472 ) Add: Share-based compensation expense(1) 35,152 20,891 115,704 72,022 Amortization of acquisition-related intangible assets(2) 2,508 2,791 10,059 6,266 One-time acquisition costs 10 77 27 977 Litigation expenses and settlements(3) — — 10,000 — Non-GAAP operating loss $ (14,475 ) $ (5,286 ) $ (34,246 ) $ (41,207 ) Operating margin (33 )% (26 )% (31 )% (31 )% Non-GAAP operating margin (9 )% (5 )% (6 )% (11 )% (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. (3) Relates to matters that are outside the ordinary course of our business. Reconciliation from GAAP to non-GAAP net loss Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Net loss $ (53,139 ) $ (28,665 ) $ (171,097 ) $ (114,979 ) Add: Share-based compensation expense(1) 35,152 20,891 115,704 72,022 Amortization of acquisition-related intangible assets(2) 2,508 2,791 10,059 6,266 One-time acquisition costs 10 77 27 977 Litigation expenses and settlements(3) — — 10,000 — Release of valuation allowance(4) — — — (4,014 ) Non-GAAP net loss $ (15,469 ) $ (4,906 ) $ (35,307 ) $ (39,728 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. (3) Relates to matters that are outside the ordinary course of our business. (4) Relates to a non-recurring income tax adjustment associated with the Brandfolder acquisition. Anti-dilutive shares (in thousands) January 31, 2022 2021 Shares subject to outstanding common stock awards 11,855 11,299 Shares issuable pursuant to the Employee Stock Purchase Plan 52 162 Total potentially dilutive shares 11,907 11,461 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from net operating cash flow to net free cash flow Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ (152 ) $ 15,204 $ (3,512 ) $ (15,648 ) Less: Purchases of property and equipment (1,394 ) (1,513 ) (10,563 ) (4,176 ) Capitalized internal-use software development costs (1,197 ) (1,635 ) (6,706 ) (7,608 ) Payments on principal of finance leases — (2,156 ) — (4,129 ) Free cash flow $ (2,743 ) $ 9,900 $ (20,781 ) $ (31,561 ) Reconciliation from revenue to calculated billings Three Months Ended January 31, Year Ended January 31, 2022 2021 2022 2021 (in thousands) Total revenue $ 157,386 $ 109,871 $ 550,832 $ 385,513 Add: Deferred revenue (end of period) 334,662 223,997 334,662 223,997 Less: Deferred revenue (beginning of period) 267,748 182,683 223,997 158,809 Calculated billings $ 224,300 $ 151,185 $ 661,497 $ 450,701 SMARTSHEET INC. Reconciliation from GAAP to Non-GAAP Financial Measures (unaudited) Reconciliation from GAAP to non-GAAP operating loss guidance Q1 FY 2023 FY 2023 Low High Low High (in millions) Loss from operations $ (75.5 ) $ (73.5 ) $ (301.0 ) $ (291.0 ) Add: Share-based compensation expense(1) 48.0 48.0 201.0 201.0 Amortization of acquisition-related intangible assets(2) 2.5 2.5 10.0 10.0 Non-GAAP operating loss $ (25.0 ) $ (23.0 ) $ (90.0 ) $ (80.0 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. Reconciliation from GAAP to non-GAAP net loss guidance Q1 FY 2023 FY 2023 Low High Low High (in millions) Net loss $ (75.5 ) $ (73.5 ) $ (301.0 ) $ (291.0 ) Add: Share-based compensation expense(1) 48.0 48.0 201.0 201.0 Amortization of acquisition-related intangible assets(2) 2.5 2.5 10.0 10.0 Non-GAAP net loss $ (25.0 ) $ (23.0 ) $ (90.0 ) $ (80.0 ) (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 and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. View source version on businesswire.com: https://www.businesswire.com/news/home/20220315006072/en/
Smartsheet Inc. Investor Relations Contact Aaron Turner investorrelations@smartsheet.com Media Contact Chrissy Vaughn pr@smartsheet.com