Shares of the work management platform Smartsheet (NYSE:SMAR) are surging in the pre-market session today after the company posted better-than-anticipated second-quarter results. Revenue increased by 26.2% year-over-year to $235.6 million, surpassing estimates by $6 million. Additionally, EPS of $0.16 outperformed expectations by $0.09.
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Smartsheet is experiencing robust demand from enterprises for its solutions and is actively focusing on generative AI to boost its leadership in the enterprise work management market. In Q2, its Subscription revenue rose by 28% to $221.5 million, while Professional services revenue grew by 7%. Impressively, the GAAP net loss for the quarter narrowed to $33.4 million from $62.3 million in the year-ago period.
Furthermore, its dollar-based net retention rate stood at 121%, and the number of customers with annualized contract values (ACV) of $100,000 or above rose by 36% to 1,665.
Looking ahead to Fiscal Year 2024, Smartsheet expects total revenue to be in the range of $950 million to $953 million, with an anticipated EPS range of $0.53 to $0.57. Additionally, for the third quarter, total revenue is anticipated between $240 million and $242 million, along with an EPS range of $0.08 to $0.09.
Overall, the Street has a consensus price target of $51 for Smartsheet, along with a Strong Buy consensus rating. This implies a substantial 26.4% potential upside for the stock.
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