Smartsheet tumbles 18% on billings weak spot; outcomes seen as ‘blended’ By Investing.com

Smartsheet (NYSE:) shares plunged 18% in premarket Thursday after the corporate’s billings numbers trailed analyst estimates.

Whereas EPS of $0.18 and of $219.9 million (up 31% year-over-year) got here in higher than the consensus estimates of $0.08 and $214.1M, respectively, billings missed the consensus by $2M.

Subscription income grew 33% year-over-year to $206.0M. Skilled providers income got here in at $13.9M, representing a 7% year-over-year development.

“We’re seeing robust demand from our enterprise prospects, who proceed to decide on Smartsheet to assist them accomplish their mission crucial work and resolve their hardest issues. Trying forward, we’re planning to increase the AI-based capabilities in our platform to assist our prospects unlock new, larger worth work,” mentioned CEO Mark Mader.

For the complete 12 months, the corporate expects Q2/24 EPS within the vary of $0.07-$0.08, in comparison with the consensus of $0.07, and income within the vary of $228M-$231M, in comparison with the consensus of $230.4M. Nevertheless, the corporate’s FQ2 billings information got here in $19M under consensus.

For the complete 12 months, the corporate expects EPS within the vary of $0.37-$0.44, in comparison with the consensus of $0.35, and income within the vary of $943M-$948M, in comparison with the consensus of $946M.

Citi analysts lowered the worth goal to $49 per share on the Impartial-rated SMAR shares.

“Whereas the rev/EBIT guides proceed to look conservative, we’re extra cautious on the FY billings information that assumes each enhancements in shut charges and contributions on expanded advertising spend,” they mentioned.

Morgan Stanley analysts additionally reduce the worth goal, going to $55 on the Chubby-rated SMAR inventory.

“Barely weaker than anticipated Q1 combines w/ extra materials Q2 billings draw back, creating harder 2H setup to achieve unchgd 20% FY24 billings development. Margin upside could also be discounted as traders query its contribution to weaker top-line. New initiatives mix w/ Enterprise momentum protecting us OW,” the analysts mentioned.

(Extra reporting by Senad Karaahmetovic)