Shares in Smartsheet Inc. dropped by nearly 20% in late trading today after the management platform provider missed on its free cash flow outlook.

For its fiscal first quarter that ended on April 30, Smartsheet reported earnings before costs such as stock compensation of 18 cents per share, up from a loss of 18 cents per share in the same quarter of last year. Revenue came in at $219.9 million, up 31% year-over-year. Both were beats, as analysts had been expecting earnings per share of eight cents on revenue of $214.1 million.

Smartsheet saw its subscription revenue grow 33% year-over-year, to $206 million, while its professional service grew 7%, to $13.9 million. Net operating cash flow came in at $34.6 million in the quarter, up from negative $5.1 million the year prior.

The company reported total billings of $215.5 million, up 20% year-over-year, driven by customer growth. Smartsheet saw its number of customers with annualized contract values of $100,000 or more grow 42%, to 1,589, customers spending $50,000 or more grew 33%, to 3,343, and customers with a spend of $5,000 or more grew 16%, to 18,483.

Highlights in the quarter include Smartsheet launching a free plan that lets individuals and small teams get started with task and project management. The company also launched new dashboard features designed to make dashboards more informative, visually appealing and on-brand.

“We are seeing strong demand from our enterprise customers,” Mark Mader, president and chief executive officer of Smartsheet, said in the company’s earnings release. “Looking ahead, we’re planning to expand the AI-based capabilities in our platform to help our customers unlock new, higher-value work.”

For its fiscal second quarter of 2024, Smartsheet said it expects adjusted earnings of seven to eight cents per share, revenue of $228 million to $231 million and free cash flow of $31.9 million. Analysts were expecting seven cents, $230.4 million and $23.5 million.

For its full fiscal year, the company expects adjusted earnings of 37 to 44 cents per share on revenue of $943 million to $948 million. Analysts had expected 35 cents and $946 million. Smartsheet also said it expects a free cash flow of $110 million for the full year, lower than the $110.9 million expected.

As Marketwatch pointed out, combined with an free cash flow beat in its second-quarter outlook, the full-year figure indicates that cash flow for the remainder of the year could underperform expectations by a greater degree than the $900,000 gap between the forecast and what analysts were expecting.

Image: Smartsheet