Shares in Smartsheet Inc. rose about 2% in late trading today after the management platform provider reported strong earnings and revenue in its fiscal third quarter.

For the quarter that ended Oct. 31, Smartsheet reported adjusted net income of $22.6 million, or 17 cents per share, up from a loss of $1.9 million, or one cent a share, in the same quarter of last year. Revenue rose 23%, to $245.9 million. Both were beats, as analysts expected nine cents per share on revenue of $241.35 million.

Billings in the quarter rose 22% year-over-year, to $268.5 million, and Smartsheet is keeping its customers, with a dollar-based retention rate of 118%. The number of customers with annualized contract values of $100,000 or more grew to 1,779, up 32% year-over-year; customers spending $50,000 or more rose 26% to 3,719, and customers spending $5,000 or more grew 11% to 19,389. The average annual contract value of all customers rose 16% year-over-year, to $9,225.

Net operating cash flow in the quarter was $15.1 million, up from negative $1.8 million in the third quarter of the previous fiscal year. Free cash flow was $11.4 million, or 5% of total revenue, up from negative $4.6 million last year.

Recent business highlights include Smartsheet adding generative artificial intelligence capabilities to its work management platform in September. The generative AI capabilities conduct data analysis from conversational prompts and an AI-powered assistant delivers customized, natural language responses tailored to individual customers.

The generative AI assistant can also create tailored workflows based on a user’s response to the question, “What do you want to do?” as well as generate formulas, sheet summaries and translations based on a natural-language description.

“We exceeded expectations on the top and bottom lines this quarter,” Chief Executive Mark Mader said in the company’s earnings release. “Our enterprise customers are operating more durable, more mission-critical solutions on the Smartsheet platform than ever before. We remain focused on bringing our latest innovations to the market so new and existing customers can fully capitalize on our enterprise-leading platform.”

For its fourth quarter, Smartsheet expects adjusted earnings per share of 17 to 19 cents on revenue of $254 million to $256 million. The earnings per share were ahead of an expected 11 cents, while the revenue outlook was roughly in line with an expected $255.36 million.

For its full fiscal year 2024, the company expects earnings per share of 68 to 69 cents on revenue of $955 million to $957 million, both ahead of the 55 cents and $952.93 million predicted by analysts.

Image: Smartsheet