UPDATED 22:06 EDT / SEPTEMBER 07 2021

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Smartsheet shares drop despite better-than-expected earnings

Shares in work management platform provider Smartsheet Inc. dropped in after-hours trading today despite its reporting better-than-expected second-quarter earnings results.

For the quarter ended July 30, Smartsheet reported total revenue of $131.7 million, an increase of 44% year-over-year and up from $117.1 million in the previous quarter. The company’s loss before costs such as stock compensation came in at $5.2 million, or five cents per share.

Analysts had been predicting an adjusted loss of 13 cents a share on revenue of $125.5 million.

The stronger-than-expected results were driven by subscription revenue that rose 45% year-over-year, to $121.1 million. Smartsheet’s professional services revenue also rose 40% from the same quarter of last year, to $10.6 million.

Takeaways in the quarter included massive expansions among its enterprise customers from customers that included Zoom Video Communications Inc., Gap Inc., and Whirlpool Corp.

The company has benefited from what it describes as “hybrid work is the new normal,” a mix of working at home and in the office as the U.S. somewhat recovers from the COVID-19 pandemic. A spokesperson for Smartsheet told SiliconANGLE that 68% of workers prefer a hybrid workplace model and that to adapt to this new reality, “leaders must deploy tools to enable their employees to work efficiently, securely and sustainably without risk of burnout.”

Smartsheet is now used by 90% of the Fortune 100 and 80% of the Fortune 500, the company said. Notable companies and organizations using Smartsheet include the U.S. National Aeronautics and Space Administration, Uber Technologies Inc. and Populous Inc.

“Our strong results this quarter reflect the continued rapid adoption of our platform in new deals and expansion within existing customers,” Mark Mader, president and chief executive officer of Smartsheet, said in a statement. “Across the globe, customers choose Smartsheet to manage programs at scale, automate workflows across systems, and rapidly configure no-code solutions.”

Looking forward, Smartsheet predicted revenue of $138 million to $139 million in its fiscal third quarter and an adjusted loss of $12 million to $15 million, or 10 to 12 cents per share. For the full fiscal year, the company predicts revenue of $530 million to $533 million and an adjusted loss of $45 million to $55 million, or 36 to 44 cents per share.

Smartsheet’s forward estimates were roughly in line with what had been predicted, but perhaps investors were looking for better. Smartsheet’s share price fell more than 3% in after-hours trading.

Image: Smartsheet

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