Enterprise software firm Smartsheet beat Wall Street's revenue and earnings targets for its fiscal first quarter but disappointed with its billings and sales outlook. SMAR stock plunged on the news Thursday.
The Bellevue, Wash.-based company late Wednesday said it earned an adjusted 18 cents a share on sales of $219.9 million in the quarter ended April 30. Analysts polled by FactSet had expected earnings of 8 cents a share on sales of $214.1 million. In the year-earlier period, Smartsheet lost 18 cents a share on sales of $168.3 million.
Smartsheet turned profitable for the first time on an adjusted basis in its fiscal fourth quarter.
However, Smartsheet's billings in the first quarter were $215.5 million, missing Wall Street's estimate of $219 million. Also, its billings guidance for the current quarter was $228 million, which was well below views for $248 million.
SMAR Stock Dives After Report
On the stock market today, SMAR stock tumbled 17.5% to close at 40.44. During the regular session Wednesday, SMAR stock dropped 5.2% to close at 49.
For its fiscal second quarter, Smartsheet predicts adjusted earnings of 7 to 8 cents a share, vs. views for 7 cents. It projected sales of $228 million to $231 million, up 22% to 24% year over year. The midpoint of its sales outlook was $229.5 million, vs. Wall Street's target of $230.4 million.
Meanwhile, Smartsheet raised its earnings outlook for the full fiscal year and kept its sales goal. Based on the midpoint of its outlook, the company now expects to earn an adjusted 41 cents a share on sales of $945.5 million. Three months ago, it had forecast earnings of 35 cents a share, based on the midpoint of its outlook.
Analysts called for full-year earnings of 35 cents a share on sales of $945.9 million.
Smartsheet Planning To Add AI Features
Smartsheet offers a cloud-based platform for work management. More than 80% of the companies in the Fortune 500 use Smartsheet to implement, manage and automate processes across a broad array of departments and use cases.
"We are seeing strong demand from our enterprise customers, who continue to choose Smartsheet to help them accomplish their mission-critical work and solve their toughest problems," Chief Executive Mark Mader said in a news release.
He added, "Looking ahead, we're planning to expand the AI-based capabilities in our platform to help our customers unlock new, higher value work."
SMAR stock is on the IBD 50 list of top-performing growth stocks.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
