Smartsheet delivered another set of excellent results with fourth quarter revenues up 43% year over year to $157.4 million. Full-year revenues also rose 43% to $550.8 million. For a company the size of Smartsheet, this is impressive growth.
Mark Mader, President and CEO of Smartsheet, commented: “Our results this quarter cap off an incredible fiscal year at 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.”
The growth comes at a cost, with Smartsheet reporting an operating loss of $52.1 million for the fourth quarter and $170 million for the full year. Despite this, Smartsheet will continue to focus on growth in the year ahead and predicts revenue growth of between 38% to 39%, with total revenue of $162-$163 million (in Q1).
Smartsheet sees growth everywhere
Smartsheet passed several milestones during the year, having passed 10 million users. According to Okta’s 2022 Business at Work study, Smartsheet is now the most popular work management platform that businesses use alongside Microsoft 365. The success of Smartsheet is powered not just by new customers but also by existing ones.
Mader noted: “A global wireless communication provider doubled their ARR in FY ’22 through 14 separate transactions of $50,000 or more. These represented sales to new departments as well as expansion across existing departments, up-leveling their Smartsheet usage by attaching capabilities that allow groups to scale and integrate Smartsheet workflows.” Source: “The Motley Fool”
The land and expand strategy is working across the customer base and saw net dollar retention rise to 134% (123% in 2021). Target, Lucid Motors, Herman Miller, Zendesk, Beyond Meat, PACCAR, General Mills, Daimler, and Goodwill in the fourth quarter alone increased their investment.
Smartsheet is also adding more new customers. It signed 286 new deals of more than $50,000 and 98 of more than $100,000 in Q4, higher than the previous year. It now has 2,354 customers with an ACV of >$50,000, and 15,150 spend more than $5,000.
The employee count increased by 624 to 2,539, and it also opened an office in Germany. This coincided with the creation of Smartsheet Regions. These first two regions are US and EU, and it plans to add more. Mader noted that it would be expanding into Japan in this fiscal year.
Product enhancements
Smartsheet has also continued to enhance its products and services during the year. It announced integrations to Adobe Creative Cloud, Webex, HubSpot and MuleSoft at its annual conference, Engage. It introduced Portfolio WorkApps, building on the no-code capabilities of Smartsheet.
At an earlier Engage event, in June 2021, it announced Smartsheet for marketing, several security enhancements and partnerships with McAfee and LucidSpark. It has continued to deliver innovations across its work management product portfolio.
Enterprise Times: What does this mean
Another stunning set of results from Smartsheet. However, they are not the only ones in the work management sector to grow substantially. It demonstrates that organisations are rapidly adopting work management solutions with remote and hybrid working.
These impressive growth trajectories will end at some point. The dust will settle, and we will find out who the market leaders are. Smartsheet has certainly put itself in a good position to claim a substantial market share. However, it is not alone.
While monday.com has smaller revenues ($308.2 million in 2021), its growth rate at 91% is much higher. It will also face competition from ClickUp, Wrike and Asana, though Wrike seems to have faded slightly since its acquisition by Citrix. Over the next two years, there will be a fierce battle to expand geographically and across industries. Smartsheet may need to accelerate its international growth plans to keep up.
