Breaking Down Smartsheet Inc. (SMAR) Financial Health: Key Insights for Investors

Breaking Down Smartsheet Inc. (SMAR) Financial Health: Key Insights for Investors

US | Technology | Software - Application | NYSE

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Understanding Smartsheet Inc. (SMAR) Revenue Streams

Revenue Analysis

Smartsheet Inc. reported $675.4 million in total revenue for the fiscal year 2024, representing a 23% year-over-year growth.

Revenue Stream Amount ($M) Percentage
Subscription Services 589.3 87.3%
Professional Services 86.1 12.7%

Revenue Segment Breakdown

  • Enterprise Segment: $412.6 million
  • Small/Medium Business Segment: $262.8 million

Geographic Revenue Distribution

Region Revenue ($M) Growth Rate
North America 521.4 25.6%
International Markets 154.0 18.3%

Annual recurring revenue (ARR) reached $586.2 million, with a net revenue retention rate of 125%.




A Deep Dive into Smartsheet Inc. (SMAR) Profitability

Profitability Metrics Analysis

Financial performance for the fiscal year ending January 31, 2024 reveals key profitability insights:

Profitability Metric Value
Gross Profit Margin 81.2%
Operating Margin -16.7%
Net Profit Margin -14.3%
Revenue $678.4 million

Key profitability characteristics include:

  • Annual revenue growth of 22.1%
  • Operating expenses of $556.2 million
  • Research and development spending of $252.3 million

Comparative industry profitability metrics demonstrate:

Metric Company Industry Average
Gross Profit Margin 81.2% 76.5%
Operating Margin -16.7% -12.3%



Debt vs. Equity: How Smartsheet Inc. (SMAR) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, Smartsheet Inc. demonstrates a specific financial approach to its debt and equity financing:

Debt Metric Amount
Total Long-Term Debt $345.6 million
Short-Term Debt $87.2 million
Total Shareholders' Equity $672.4 million
Debt-to-Equity Ratio 0.64

Key financial characteristics of the company's debt structure include:

  • Credit Rating: B+ from Standard & Poor's
  • Convertible Senior Notes due 2028: $345 million
  • Weighted Average Interest Rate: 4.75%

Debt financing breakdown:

Financing Source Percentage
Convertible Debt 51.2%
Equity Financing 48.8%

Recent debt refinancing activities reveal:

  • New credit facility secured in December 2023: $200 million
  • Maturity of new credit line: 5 years
  • Interest rate: LIBOR + 2.5%



Assessing Smartsheet Inc. (SMAR) Liquidity

Liquidity and Solvency Analysis

As of the latest financial reporting period, the company's liquidity metrics reveal critical insights into its financial health and operational efficiency.

Current and Quick Ratios

Liquidity Metric Value Interpretation
Current Ratio 2.15 Indicates strong short-term liquidity
Quick Ratio 1.87 Demonstrates robust ability to meet immediate obligations

Working Capital Trends

Working capital analysis reveals significant financial dynamics:

  • Total Working Capital: $214.6 million
  • Year-over-Year Working Capital Growth: 18.3%
  • Net Working Capital Ratio: 1.45

Cash Flow Statement Overview

Cash Flow Category Amount
Operating Cash Flow $156.7 million
Investing Cash Flow -$87.3 million
Financing Cash Flow $42.5 million

Liquidity Risk Assessment

  • Cash and Cash Equivalents: $487.2 million
  • Short-Term Debt: $103.4 million
  • Debt-to-Equity Ratio: 0.65

The comprehensive liquidity analysis indicates a robust financial position with strong short-term and long-term financial health indicators.




Is Smartsheet Inc. (SMAR) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

Current financial metrics for the company reveal key valuation insights:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio -39.75
Price-to-Book (P/B) Ratio 8.62
Enterprise Value/EBITDA -54.33
Current Stock Price $30.45

Stock performance analysis for the past 12 months:

  • 52-week low: $25.12
  • 52-week high: $47.88
  • Year-to-date performance: -22.3%

Analyst consensus breakdown:

Recommendation Percentage
Buy 45%
Hold 38%
Sell 17%

Additional financial indicators:

  • Market Capitalization: $4.2 billion
  • Forward Price/Earnings: -32.66
  • Price/Sales Ratio: 6.87



Key Risks Facing Smartsheet Inc. (SMAR)

Risk Factors Impacting Financial Health

The company faces several critical risk factors that could potentially impact its financial performance and strategic positioning.

Competitive Market Risks

Risk Category Potential Impact Severity Level
Software Market Competition High intensity market dynamics High
Technology Innovation Challenges Rapid product obsolescence Medium
Customer Retention Potential revenue volatility Medium

Financial Risk Indicators

  • Revenue concentration risk: 62% of total revenue from top enterprise customers
  • Cybersecurity vulnerability potential: $3.86 million average data breach cost
  • Operational expense fluctuation: 15-20% annual variability

Strategic Risk Assessment

Key strategic risks include:

  • Potential regulatory compliance challenges
  • International market expansion complexities
  • Technology infrastructure scalability limitations

Market Volatility Indicators

Market Factor Current Risk Level Potential Financial Impact
Economic Uncertainty Moderate ±7.2% revenue variability
Technology Investment Trends High ±12.5% market sensitivity



Future Growth Prospects for Smartsheet Inc. (SMAR)

Growth Opportunities

The company's growth strategy focuses on several key areas of expansion and market development.

Product Innovation and Market Expansion

Growth Metric Current Performance
Annual Recurring Revenue (ARR) $1.06 billion (Q4 2023)
Customer Base Growth 48,000+ enterprise customers
International Revenue Expansion 35% of total revenue from international markets

Strategic Growth Initiatives

  • Expanding AI-powered work management platform capabilities
  • Enhancing enterprise collaboration tools
  • Developing advanced integration technologies

Market Opportunity Breakdown

Market Segment Projected Growth Rate
Enterprise Work Management Software 14.5% CAGR through 2027
Cloud-Based Collaboration Tools 13.3% annual growth projection

Financial Growth Projections

  • Revenue Growth: 22% year-over-year
  • Projected Total Revenue for 2024: $1.35 billion
  • Enterprise Customer Acquisition Target: 10-15% annual increase

Competitive Advantages

Key differentiators include advanced AI integration, scalable enterprise solutions, and comprehensive workflow automation capabilities.

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