Smartsheet shares rose 6% in after-hours trading Thursday after the Bellevue, Wash.-based work management software company reported better-than-expected earnings for its fiscal second-quarter ended July 31.
Total revenue was $235.6 million, up 26% from the same period last year, surpassing estimates. Subscription revenue was up 28% to $221.5 million.
Smartsheet reported a GAAP net loss of 25 cents a share, down from a net loss of 48 cents in the year-ago quarter.
The company saw some signs of “macro stabilization,” particularly with its enterprise customers, CFO Pete Godbole said during the company’s earnings call. He added: “However, we are still seeing elements of budgetary caution across our customer base, which is impacting our higher velocity transactions and sales cycle duration.”
Smartsheet in July introduced several AI features, including a large language model that provides insights and visualizations based on user data, an AI-powered assistant to navigate the platform and answer questions, and a feature that generate formulas based on natural language prompts.
CEO Mark Mader said the company plans to make the AI tools more broadly available after its customer conference Engage this month.
On the earnings call, Mader said customers so far are reporting “a dramatic reduction in cost” thanks to the AI tools.
The company forecasts revenue of $240 million-to-$242 million for the next quarter, year-over-year growth of 20% to 21%.
Smartsheet projects full-year revenue of $950 million-to-$953 million, up 24% year-over-year, as it approaches $1 billion in annual recurring revenue.
Update: Smartsheet CEO Mader was interviewed by CNBC’s Jon Fortt on Friday. Mader said the company remains “quite selective” in who it asks to come back to the office. He said the company is embracing a hybrid model, maintaining a balance between in-office meetings and remote work.
“I see that as a competitive advantage we hold right now,” he said.