SMAR - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Smartsheet Second Quarter Fiscal 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator hand over Head to I Investor would speaker conference to like Turner, now your the today, Relations. of Aaron Thank you. Please ahead, go sir.

Aaron Turner

second afternoon, call. everyone, Tabitha. XXXX and you, fiscal year Good to Thank Smartsheet's quarter of earnings welcome,

discussing Today's is Mark announced Investor available in be can is also be Pete's Investor website. Chief CFO, Relations Godbole; Mader; at Q&A. call will after accompanies and being release also our our which today me Strategy There results the today. for Relations viewed during Officer, webcast available be our will in closed our investors.smartsheet.com. be a and market With the that remarks, our slide Gene the presentation replay and Events are will press on prepared of issued We the Smartsheet's website Farrell, Product CEO, section Pete

of laws. this we the will make forward-looking within statements securities the meaning During federal call,

our to We future Investor our have filings the of COVID-XX based a other in these and These including, available and not on expectations our financial forward-looking impact and events, projections around of business. on our expectations current are trends statements website forward-looking subject limited statements largely on described those on risks but our the and Relations to, www.sec.gov. website factors, SEC number SEC at about

required events, law. these statements new result not of and and may call do update materially any the to in by information except this reasonable, Although differ -- assume obligation of All as made reflected actual that forward-looking available to a us statements are as we results expectations based today, the believe information our results forward-looking or future on are as our during adversely. statements we

the our Relations A to the over in that, most to website. found measures on let the me also call, reconciliation comparable measures. Mark. certain call we addition financial turn Investor is U.S. discuss that available which U.S. can presentation accompanies be the GAAP directly In non-GAAP this will financials, GAAP With to

Mark Mader

thanks, quarter us everyone, our and to dollar-based quarter to QX Thank Revenue our which second with incorporates all quarter-over-quarter to for ARR for grew you, was for million; our XXX%. partners. Billings XX% retention by today million. $X.X customers, ended X and XX% quarter call. XX% net X our grew joining grew improved customers and million Aaron, $XXX.X $XXX.X billion. our rate, a very Smartsheet, strong We and users of to the over over earnings points

increasing domain record, of now quarterly $XX,XXX, customers account XXX ARR. customers, more than up ARR up ARR Our X,XXX In our customers our within half QX, XX% Smartsheet XXX% year-over-year. more by XX to their increasing than for An our XX% ACV over $XXX,XXX, a year-over-year included $XX,XXX more base and by with $X,XXX. average ACV expansion year-over-year than grew their

Additionally, $X and serving Smartsheet's we ARR customers XX of had now customers. those last to Enterprise demonstrate million in the quarter the over momentum $X X needs expansions compared over XX deployments scaled in quarter. million customer with have

largest with Pharmaceuticals, Hospital, Allscripts Health for Yale This industries, including companies, quarter Vertex BDO, our in And and XX% ARR. strong by expansions services industry growth with Jacobs remains QX accounting year-over-year Growth including companies professional with of Our New broad, care XX%. over supported such with growth across Intuit Global PayPal. for as industry such diversification remains in Solutions, impact Amgen, was companies Hitachi, Communications, customers sciences as high Technology. and and a was just Zoom technology, Medtronic. Communicare our health Systems Haven of Insight Prime ARR and Healthcare life Healthcare, from

and the entertainment saw strong performance and Johnson with and companies Times, NBC Gap manufacturing York such from expansion as In Burlington New Inc., Stores Universal and media Whirlpool. across addition, we Controls with expansions with retail and at

like a through this including Sky have in with shared broad they We a solution share meet advanced is its Smartsheet using case Human to project to no-code transactional Where users a Apps In transform customer customers organization. new we motion is strong that SMG, Services, At Services. solve low-friction and management, transformative chose ideally outside and excel management Thousands the their department these data capabilities acquisition enterprise-grade or to Unified core, a of team ever-changing and model this engage QX ability Smartsheet our belief needs. beyond at enable Smartsheet management. was with their tracking when workflows common and those support to viral work Health empower their Department choosing Smartsheet Field use What task business well. use [TESLAco] business. market News part, land-and-expand wins as goal and in to customers The that New inside is starts to Work go to suited work. premium made to or solutions. grows then across platform Australia, work our is often transactional customers extend operational and Hampshire possible of flexible quarter, of Our by Momentus cases designed an model, our is dynamic users their how Space, platform

over the customer leverage programs and a that and support related and to accelerate processes sales other objectives of account these And a One of Advance IT. maintaining QX, leverage heat outside Smartsheet Smartsheet a to Advance, high-volume no-code enables provider a to new launch IT, to Our deployment this And development with and this enterprise-wide power marketing capabilities. of QX, for large with Smartsheet the apps while Smartsheet a for growth of scale remove will premium spreadsheet signing transformation. with optimize Smartsheet control In Advance at and and uses planning. solutions digital Advance. are execute we significant resonance PMO, channel including between share In core WorkApps IT expansion PMO This Enterprise empowers across of speed Advance expanded of future workflows Mimecast with onboarding, partner manage and equipment immediate saw influenced XXX and was deployment. systems and prospects solutions way the compliance database. and model change management as customers considers combines agility curated to data that record, for users that at business in customer's rep friction Smartsheet flexible execute centrally multiple a of Smartsheet investment to visibility processes marketing operations, Mimecast leading now and that included centers. of configure customer Mimecast. of configure empowers to onboarding with customers smart data deals and example services security the the and product plans. departments

resonating With capture Smartsheet of of customer benefit project the further the also the by Advance Advance simplifying manufacturer, point premium A of German is the and additional the example, and platforms to customers trends productivity key improvements will extending large platform capitalize complex to was by U.S. the project process. value and drive implementation customers' capacity critical the increase across container parts Advance doubling to cycle selling new providing Smartsheet adoption Advance a ever-evolving HIT One on for e-commerce visibility our needs. cases deployed use business. and outside capabilities, end-to-end across with packaging time Holz, growing

we X.X a quarter. availability billion continue content year, at days, apps innovate requirements, the collaborate X.X was XX% between our capabilities. launch the assets created Data line manage support And growing Advance, to in to non-U.S. averaged the views Customers and our XXX% over by we per XX month-over-month. customers’ of launch single in records scheduled without Proofing on Brandfolder a will to representing month. writing To record, the data work and And announce which and of Shuttle, leverage of customers privacy close as of used have increase scale. the enables our data creation of year-over-year and QX growth Smartsheet code. customers digital since of we delivery XXX,XXX over global the platform million over new using a in Beyond compliance XX,XXX to times Regions this for customers half year-over-year continue past to digital customers content of XXX%. other first Smartsheet systems transport see processed billion XX QX,

and are first in Frankfurt, indicates located not or heightened the shared We region the increasingly require sensitive region partially, enables our be customer of to data The subject, the additional awareness not region. to the does regulations any Germany content our in In buyers coming changing announcing fully, to quarters. customers U.S. solving instantiate residency. and Smartsheet wake through in plans Smartsheet Regions forward to availability routed enterprise look that of for on research

to Smartsheet. as data can making well. thrive event even with for to business to expanded sales sync bidirectional enable it launched of MuleSoft. real-time a also ranging processes, And for we pipelines Our easier manage with from QX, partner continues Smartsheet, and HubSpot variety integration customers Connector ecosystem With partnership MuleSoft customers our In of HubSpot, we between schedules.

partner future, to workflow with mobilizing I'm embedded calculations technology across well. software day. thereof that partner our with field device the ramping to internal the reporting with. from channel a world, case, have many to systems. is interact scale team do the team interface simple person XX% desk can addition proud on grew influence a will growing no-code to data-intensive Smartsheet way creators Around of disparate the engage are a near using that business. In channel or or use whether a CWM every a a And single people of partners, of program the XXX enterprise at scaling now for computer in partners data year-over-year. choosing our execute QX, they or the We bookings In in dimensions continues combination using sophisticated everyone every

maintain shareholders our of the in leader, to TAMs record available one approach our and a are in and largest As we confident team. the our will for QX investment posture category off pursuing drive and performance, customers, coming results forward-leaning software

the Pete? to some to let our Now call turn on Pete over detail provide me financials. additional

Pete Godbole

afternoon, Thank you, Mark, everyone. and good

QX quarter. was As mentioned, another Mark strong

success outperformance was team, our guidance number enterprise QX and offering. significant to Advance record early a our Our of larger strong our of expansion, of sales by function relative deals execution a

Unless otherwise pre-COVID in surpassed on are was through our a our most results now business. basis to stated, to all and GAAP I for our release are financial aspects QX. results have that We results now the operating and will go the earnings references before non-GAAP across presentation call. reconciled expenses and our of levels posted

in subscription As revenue revenue million, $XXX.X was mentioned, XX% of quarter million, growth came representing $XXX.X up at XX%. second year-over-year year-over-year. previously The

of million, XX%. reflected revenue $XX.X revenue in highest is by history. quarterly company's was of the the growth Services sequential representing momentum $XX.X million, Our in increase sequential subscription year-over-year increase the

Turning billings. to

$XXX.X XX% billings at quarter growth total. of of represented subscription billings over Quarterly, monthly. our and billings came of were Second XX%. the in X% strong Approximately representing million, X% multiyear semiannual with year-over-year annual,

number Moving our customers represent XX% on segments over respectively, ARR to year-over-year reported year-over-year grew $XXX,XXX The XX% the with ARR. to These And and XX% of of customers over number XXX. grew of metrics. X,XXX. XX%, to ARR, with now total $XX,XXX customer

a Next, X%. rate XXX%, now average X,XXX. XX% dropped ACV to year-over-year The below of full improvement a grew rate is net dollar-based percentage and from ended churn our QX. We with domain point X the retention further quarter

exit we reminder, which in our headwind, retention Brandfolder in rate. retention to believe dollar-based above year acquisition, net we a lap result the XXX%. dollar-based X- of on X-point a Inclusive headwind rate will we with this a net As will the QX, will

to back turning the Now financials.

gross Our than higher points the quarter. was percentage margin XX%, X total previous

gross QX X was margin the XX%, higher previous than points Our also quarter. percentage subscription

of fiscal margin due sales This function against million and across the 'XX We to in continue our ago. from flow X% year to our $X.X XX% collections. our million, loss negative and operating was and or negative in marketing revenue inherent a R&D for X% scale revenue, strong between guidance was an a XX%. improvement be Free lines cash our model. was overachieved which of margin $X.X year of to Overall, expect gross improvement quarter

me let guidance. to on move Now

of $X.XX range $XXX outstanding to non-GAAP operating of year shares the $X.XX be in be expect share range range be $XX For million, $XXX the $XXX the $XXX average million, fiscal to weighted per between $XX on loss and million. to be of in the 'XX, non-GAAP million third XXX quarter loss of revenue million we billings in net million to to of to and based million, to

Our to negative range is net in the be free million expected cash negative $XX of flow to million. $XX

and our in million, Billings to in $XXX our strong of to of growth and 'XX be $XXX are XX% $XXX of Given momentum billings our business, fiscal revenue be to representing million the XX% XX%; the continued revenue raising year million, we of results range growth we We guidance. to QX $XXX full to in expect range to the see year representing XX%. million our now

We non-GAAP in weighted net non-GAAP operating be expect and million, the outstanding. of million $X.XX share be on average range $XX the to $XX based between $X.XX loss to shares and XXX loss to million for approximately per year

evidenced them: early cash by between outperformance, year negative is is flow in with our $XXX,XXX; in To record a and were customers signal. fiscal with traction, environment strong Dynamic a be than our of with resonance ARR offering quarter front margin expectation in free negative conclude, the opportunity our and big platform investing The over behind demand several in this Our $X increase X% 'XX expansions enterprise and million. indicates the this we We of us across which and billings and of to apparent number fronts. Among see of greater Advance; X%. segments pleased Work sequential in are quarter success by that geographies;

to it back operator questions. let for the me Now turn Operator?

Operator

from your Jefferies. with of Instructions]. Thill the Brent question And first [Operator is line

Brent Thill

Mark, time then I having? also, large it's a I'm impact of enterprise, on could Pete if And little that had quick And know early just curious a type is mentioned you're I in Pete, traction you the follow-up. on on What for spend Advance. seeing. drilling

Mark Mader

X of Brent, it's seeing really on combination growth a dimensions.

the people platform. The on on enrolling people dimension seat is the more first

elevating think nice from faster of These doing way event they're think, management, really things routines The scaling sort are platform. do sort with and can a would planning. process of are, to Advance fairly second giving the that implementing everything giving legacy task think access people is be entire coordination the it's people I which I composite is Advance offering I And work of offerings. where different a they better systems. I what than certain import is much what doing, transactional may say what suite team And from a

Brent Thill

just not I as walk and a for ask, what's down you onetime maybe it bridge on there's through XX% perhaps that's the in to decel. having perhaps will Can some it's Many the just Pete, Can looks? some sharp And low M&A And why guide. why as billings just know XXs such decel maybe impact. happening you QX? maybe severe

Pete Godbole

half a this is COVID The quarter-by-quarter part is The to Pete. the impacted That's X base, comp recovery have economic starting Brent, points first represent different from of in realities. base. on Sure, comparison a half a second that the a compared represents it. to and recovery

in in year of the we part fiscal first second base. of it Brandfolder 'XX, half The is had no the

our which million of would guidance in about guidance, you XX% terms pickup, you growth. when we Now a into into specific your our revenue if of about year-on-year XX% of our factored guidance QX 'XX, QX, in a sort recall, fiscal had $X.X question to or acquired year put deferred onetime make

Operator

question Mark with the And Morgan. of Murphy from your is line JP next

Pinjalim Bora

business the automation seeing well Pinjalim becoming on now has behalf One on lot the as quarter, uptake been is seeing? Are build of a product more a deeply part terms since of is such question, embedded been kind few guys. Congrats direction that feedback? it that processes? launched This of of workflow What Mark. so Bridge. enterprise cross-functional that you're has of into the in Smartsheet far quarters you customers that you of the Is

Mark Mader

have really across Yes, just of it Bridge. all Pinjalim, it's not -- think to connectors, about you our

and offering. Bridge, are included purpose-built a in then And Data Advance our connectors. it's of our those So Shuttle combination

well of on-prem availability significant the transferred a as increase and that it's with are Bridge Smartsheet as importantly, cloud both connect significant workflows of seeing SaaS the systems. those or to connectors, of being so we of other to systems offerings in And us a And and number between of number and amount data record. enabling legacy other other

the process. we or into workflow data many that to sources where are of Smartsheet see a from there so solutions customers are out multiple manage And pulling today

that using life to of a really systems into us the we management So believe organization. that is leading Smartsheet of manufacturer embeds that's we from Shuttle to Data multiple their have core cycle the A example actually of data manage pull great workflow definitely sportswear into offerings. legacy sportswear product

And so in them make helps to and about it manage better actually out of inventory, logistics products. win out decisions cycle the change

Pinjalim Bora

Understood.

X other and the more products? some about do bit, sequential? Is driven you think does said. look how little about a that quick talked you million double other seats more offering, over by between by you I that driven Is how you seats -- offerings, that -- to Just expansions $X mix that if capability-based of million, think these at X or

Pete Godbole

our of speak this I to notable deals to think them is will top Advance. that be what of X XX quarter, contained

deals all are consumption. as well seat hybrid capabilities consumption these you So as where have

that's think best to probably point I to. marker the

Operator

is Truist of And with Securities. question next Tillman from line the Terry your

Unidentified Analyst

This I is the for go Pastelle] on we had the to on back [Colin quickly. about quarter. when talk international, and wanted Congrats Terry. just

So we between and different one international of curious the expand you can cases markets. the that maybe kind about was mentioned things some you What cases that there U.S. use use there? those were was, maybe were of

Pete Godbole

very [Colin], vector well. The as play out it use this is seen strong as There's cases are demand the see as domestic. internationally kinds consistent. out Pete. we saw was internationally play the U.S. use we've We of same internationally that cases

Unidentified Analyst

Perfect. And follow-up. then just X quick

how And should about of bigger land going for you and larger X-figure of in above, linearity in deals, continue we are changes any forward? forecasting there deals? some those kind So as these to terms think

Pete Godbole

we've these back is, expect transactions a QX, larger for weight play start to to we and transactions. What seasonality seen. see to in I'd grow, out. That's half you closing start are going as enterprise see should we'll a an trend software you're So say larger the

Operator

line Scott next the Berg question from with And of is your Needham.

Unidentified Analyst

This Congrats Scott on is quarter. [Jon Levin] Berg. for on the

Just stages, standardize you CWM guys starting there market curious, be of coming in given to multiple would customers are still early solution much Any very color vendors? having seeking that out its the pandemic, helpful. versus single is to see the more

Mark Mader

teens, of greenfield. see we're opportunity, what at like called we -- still would competitors -- consider consider XX%, we in direct very XX% we look we which category, a Yes, We which is low huge When contested. consider our opportunities. talking

the are vast not. majority So

use within think when in it when it's sort an to IT is teams within elevates transactional team organization, that many those formally cases, there's about of is solution. diversity So might approve. we so quite different choose a in see common a less Where we divisions scenarios asked businesses where and

decision making sure have that authentication making consistency make seeing mean are sure a would one. aligned those it's we the mechanisms, IT that So all That's policy, for that in where pieces. with we

numbers of one However, over We would as I are that's We say change an of available expect -- of the as percentage the few the those still to heavily TAM dimension. we've were market time, so low that people quite and been talking invested enterprise single-digit on opportunities do forming. penetrated. is reasons

Operator

with line next your George And from question of Oppenheimer. is the Iwanyc

George Iwanyc

are see tools contested still right that up now? those are opportunity you you you of What Mark, Or deals just head-to-head is greenfield, you Do majority competitive following on like gave. when displacing? displacing? the answer very many just the

Mark Mader

hear I another of as not said, think, of deals, status you competitor, roughly I named XX% quo. the about sort would But of

number sophistication As expecting the that the ladder is precipitously. customer of up what terms you the move in falls of

dimension not move use asset more Brandfolder management digital you there. tax on basic if you're options cases, lot So you're in with see to for looking Smartsheet management, tracking, going whether there's coordination, team combining The of of combo, players a up, it's market right? work that. the again, as And for

providers, like being see views maybe markets traditional almost of no displaced, the PPM are certain So of terms planned in there. the And you the competition world. of that considered companies the that are legacy, think

PPM job to neat getting team #X that. of opportunity like us ranking there's recently. take ranked a great markets share GX And done I a significant really has in think the in the

a opportunity take neat So to there we share. really see also

George Iwanyc

the partners Smartsheet Okay. new there? that solid. are pretty continues And your then that to incremental going generation And How to be customer Regions is be contributing leverage forward? now feel expect available? do about going do How you you

Gene Farrell

Yes.

I think Gene. -- this is

call, overall graduate support of to growth. we're more are I seeing in think discover As and how And and they're we And we a called higher-level move land out capabilities. absolutely they we to partner uptick learn what looking can contribution smart nice possible on ARR sheet. that and at what's as then up to often capable deployments as the customers

land the important And to to as well drive it's so think pretty aggressively both motion. we as continue expansion

I makes when really where where think residency to to data will Regions like of their look markets challenging the been for host manage a for way all has markets it nice particularly at regulatory customers, concern information be you a us States. environment Germany, companies and in reach the United local for

in And Frankfurt our first will region come. launch so of for us, unlock and more there we to an the as be see

Operator

next your from is the Bachman with of line BMO. Keith And question

Keith Bachman

I questions, I had X could. if

think thinking time of you competitors growth how think those Or to are investors operating but to How have about realizing if cash about given. positive percent do generating generating targets? And you first you're targets, trying both which I the including you've do and free those is, longer-term how XX-plus call margins yourself to are I a How it, targets free understand about that? a path then The or very follow-on, at about your positive thinking try which of income? your to profit when fast, I could. growing previously flow, none flow cash want of, the should realize

Pete Godbole

get is gave between we was 'XX of revenue. and full $X total guidance Keith, fiscal on The So to revenue the 'XX Pete. year billion this we'd year

expect of that expect back in half to to the 'XX. be We be FY that, that the year. When to we we in get

capable of at generating flow that to is model So we scale. free believe our number, when cash we get

the the as We think that's completely invest possible we've meantime there. kind made. in it's to get of and we So statement

the invest and huge taking we're ahead So all to the sort of us. of of that's advantage opportunities dance

Keith Bachman

Okay.

just my your your it relatively XX% second Let still client still very average What going And average spend, so per percent question, customer year-over-year. for of though, ACV me to represents base. -- is a is rapidly, speak, yet, small that main per the not sources over of accelerating? the friction that what tactics you you're to taking customer average keep and the growing see months? growing are to keep ACV if number XX main strategies are that And that next

Mark Mader

Yes, we've grown, on quite few we're I in I like feel a think, of for north of quarters don't feeling XX% lot now. that. row a a friction

really Advance to and give the With then customers mechanism very understand engaging straightforward for with them available introduction, making for a easier to us. it what's them

think the deals. it's right on is we of serve I rate $XXX,XXX why XXX% And one over with of see tens customers this of reasons organizations the I mean now. I today. growth landing thousands

ERP point what they value of us not well, So integration we sort their investments other is. a in it But how platform helping ROI of the investments, and lot seeing as think on we're about their our people improving it's sure customers It's is we as their the terms there's our as on think these have. sure extremely high we're presentation implementations do pathway And more coexists the understand of, our that so the entry to understand among make product really their platforms I full that some not market of suite, here. I really understand CRM is that well. to think challenge -- how into to both job well

very So progress. pleased the with -- but we're

Operator

And William your next the of with is Blair. Bhatia question from Arjun line

Arjun Bhatia

customer that the is be for Advance more from a you customers if use point understand with an more the of all it to expansion you. if transformational And to of customers love to in transactional new part the one new that maybe at deployments Mark, about? case as graduate that's that talked I'd role playing tends conversation or acquisitions?

Mark Mader

Advance had was observations group had of the quarter more rep first we I large think commercial neat really one sales from in the enterprise. our within our than that quota-carrying we

of which not from market to all asked customers up going X spectrum. X Advance, and buy, that's in to And with are coming to more assessing finding and just they out? message the is understanding think are years and capability be and my I'm are immediate they're the That year Advance a or go the that then from but security more is saying, to if resonates successful, an So and a what we're And needs? wish And what of in of to Advance down company what and more. something me the governance dimension. presentation I standpoint, months, up a IT is

what Shuttle, So to them it's a if Data integration say, control month that. they someone full the full is not to want ready first with want Because center in even don't okay, I do Salesforce, important for tremendous and say, requirement. then And some to well. find a we of with paint IT they we're their that oh is my do people, have really type corner hit success gosh, and XXX themselves to collaborating roadblock with in know out

of enough put pathway to it force So -- Advance not in like now, to the one of is the beginning, we it's enterprise. gate. all discussions and been out we've to of have every earned someone the have part around confidence our since almost the It's

You what sell someone they will need.

that them see available will you what's journey. support what And them is throughout and we're educate will starting now You that accelerate. then on to

Arjun Bhatia

then, helpful. just guidance. And maybe X the It's Wonderful. for on very you Pete,

gives us billings the full just to seeing I that know revenue raise we've you saw a meaningfully? million both you're think through you level we increase walk -- what I pipeline don't through August don't so year. that and seen to maybe the almost think $XX raise I of and the for guidance confidence before. Can

Pete Godbole

we as were demand really signals Arjun, quarter, really emerge. strong see some at the to we pleased looked

we one sub-XX, transactional as The deals. close It was came of transactions cycle was first which the those came levels. that to in time pre-COVID consider to the number which business, on the back through well as

on that positive So front.

year-on-year. we $XXX,XXX we greater thing the deals. second was large saw deals, than which XXX% grew consider The Those

well. packaging. booked our gate as And which us in was X the then out XX XXX June, Advance there that first momentum strong over deals really meaningful pricing traction. announced last of quarter our and was saw we of the being very to top After with transactions. So in was gain it signal, the and We

guidance the that's shared you. and we we build our with revenue as billings seeing we've in confidence that that So are

Operator

of your question is with And line next the KeyBanc. from Enders Steve

Steven Enders

Just wanted strength the a on million the deals. little deals seeing touch in more that $XXX,XXX $X and to bit you're

are part for that sense Just support kind there want market year better within or now over helping it's you sales past in think get changed that that's to of this? biggest fundamentally a what and the the drive improved is market? within the of team the is drivers execution Do something you your think

Mark Mader

hiring, commercial think talked can we're rep to our customers throughout on would of this year. both benefit our say, as better and about were is I much are we isn't are has going think, having they observing And perceive that it? going thought combination of beginning again, when And how with at more they be we understand And value So we it? huge with this for dimension and assertively XX% well. going that so what How a we of about a to new more the great a I you're orient the much, impact. as about talking customers, think upticking, Advance, impact always offering customer, very statements we're I we for to easily the large How reps, again, team?" offering after that, for I onboarding then said, enterprise. understood quota-carrying customers, hiring But sales massive customers. sales "Hey, sales both

Steven Enders

up that. on the the about customers, thinking in continued that here augment opportunity now? that the opportunities I guess, But It's hires motion? how just in the go-to-market bringing kind of having that sales And good types of channel, you there. guess execution I help are the hear and you're and follow is channel to that how And changing

Mark Mader

you're channel also not solve to leads can who the What we're just solutioning and recognizing is areas who you. expertise brings that about provide that to is in for. certain trying It's about

care, steeped health your in additive can sales best business. steeped in manufacturing, in steeped practices, technology who's someone those have you to be if super So

combination year-on-year deals. So and both also increase, on talk people deals XX% of the when it is bringing we us about assisting a

of think I that call actually partnering a the who's already, business. significant trusted portion see go-to-market combined Smartsheet with very what that that, channel team, hybrid as the field, we we So source

Operator

And line your Wells from with question the next Turrin is of Michael Fargo.

Unidentified Analyst

in of is This X some of think increase how Turrin. quantify the the as well with deals quarter, impact success partner-led either a the Obviously, When for the piggyback ACV largest the deals large kind the there's Advance? those wanted of some Berg] the Michael maybe as on enterprise. last few you Advance, about on transactions in of or [Michael metric. of can we XX on in for both channel questions to I

to kind some curious put that. just around how of more So color

Mark Mader

of north that I transactions will a think to when is you going in we that it's look is everything do to accretive be platform. making substantive -- a at Advance, driver somebody investment all it's right? of Advance more be sign that a $XX,XXX, measure. that expect the have So We

we will continue and additional keep seats. often is flat larger of really well require that looking suite It's they're Very significant a to indicators it partners the Yes, recommendations will the then I to more itself there transactional out be if solution shaped that say when may sell a work of that substantive see been Advance platform think in I partners strength to looking I that in it's very in the management think solution by -- I we're larger more, what think it's do somebody terms are solution just is very beyond to would we very solve business of looking when than to to well the probably have -- I lends solution, you're something, see think offers. But that that I terms growth also be discussions. to They texture. presenting. suited know again, often, going know of about. the those terms business we've They offering for, which one work. speaking think are the usage that really In again, to may deeply. key more involved, pleased

Unidentified Analyst

automation and about potentially full use into using RPAs we against can with your longer but think follow-up. competitively technologically to How work helpful. it business RPA cases. you either sizable lots up your a you've talk you TAM, Very pertains When it greenfield. stated coming as and hearing quick the type keep coming platform or just And speaking, obviously, Smartsheet And term, about thematically, of the I think business?

Gene Farrell

see we're think then with not move really really the moving over -- it's wrote to part us originate And an vendors bridges we're whole why that's seen. into alliances of building say think mean, a we've teams. engage both I to saw really there ability more And an of last customers And and either/or, starting automate their complement we engage systems. being to with you we'll Gene. about as ERP RPA today, I because signal Smartsheet stack of we RPA from trying And hear seeing to maybe HR the software integration is think customers be and it's about be really strategic big it's interact a other where being kind and they software to that as from workflows our we RPA whether requires orchestration. and or are. their this into and the really able are just think suite you RPA that I systems with record, beyond part it Michael, to of your UiPath. that that what I we move process And announced are with what that quarter, to would

what that's we're building so And for.

Mark Mader

piece. one add could I If

That provides takes looking relevant user interface events. processes. And to category interface. to our with preference. our think also interface are trigger people that and will the platform years keep and that the one that's I it configure hallmarks of one the information utilize is the and update think it's to It's It's that I platform the people that actually the category only of not that thing as get very solve. and tune to years develop aligned

Operator

is line the And from your next with Jaluria of Rishi RBC. question

Rishi Jaluria

exactly actually on like to I'd First, start that.

to improve. So business by metrics, all continues

asynchronous to turning work then follow-up. turning Just up that really I've And we back want nature. recovery yet more far, during the in versus is a longer-term a saw Have headwinds much coming some show so in to in a pandemic, secular of out? more acceleration improvement and the tailwind, of SMB like just fading those tailwinds started factors, get the underlying being have how sense more metrics -- the or to of and play those got things hybrid, the business

Mark Mader

surpassed possible getting we really the what changed right? fluency changed, refreshing it's is last COVID. people's we've And the were into like feel really and think fundamentally I has months. around where And what offering has see. to need over XX I they

I calls. were. add? about are So -- back position to stronger a getting Pete, think This not this is much is today make in they people anything where to to informed

Pete Godbole

I you're in think the we're would that where in starting times, see to can you COVID space. the in what you I we seeing the say recovery were in cycle whether that transactional it's go that whether metrics, is volumes, And times. that beyond see see the

the And So think a systemic relates I we -- beneficiary think it. starting it of that. to I to are you're see as

longer-term XX the a seeing that fluency last But you're the in space the transactional that's gone clearly, or think XX months, over I has and with volumes. up, question.

Rishi Jaluria

that Pete, Okay. some like to actually was Or then, annual the there? the that of pandemic, I was duration are deals, be mix more little pre-COVID. are during of the you wanting on what's monthly billings go right, big monthly? how sign going mix talk to it And the Great. uptick to shorter deals of for to should billings know you versus higher that It we That's customers a talk billings side. there helpful. about looks a And forward? seeing annual even Can was there versus in on annual the bit willingness you more about than thinking mix? deals. a And upfront specifically kind going

Pete Godbole

we the little kind bit think, the we if mix in since the thick But plans looked more monthly vary amount might or minus. I of bit been -- a Rishi, sort of had plans, And of we saw in trend pandemic, in probably consistent the of little annual you that's from a the at seeing. the we're place. we've the then, by X% plus saw it

Operator

your of the And is with Citi. question line Tyler Radke next from

Tyler Radke

a and lot that this talked to data residency bit. topic a You little really just about expand on wanted call,

that released a it Just capability give was and of a us sense maybe for significant why breakthrough how wasn't earlier.

out. maybe some demand that for Just could feature internationally from see you give this pent-up us sense a rolling

Gene Farrell

needed last infrastructure cloud real around enable extend cloud. this in regions to unlock The to completed really to is public different public the world. transition Yes, us Gene. to into our data was ability Tyler, the residency we to the for We move year the

the resident And cloud in that specifically, adoption are hear the a significant will most we've have first or unlock Germany, have and completed In feedback has broad to less friction But the And being in don't outside in a unlock. of the that And particular, we need really requirements we We that a mean be get we so region where around transition. types in it there been us do interest we an having that after local regulations definitely set prevent the for cases. the Smartsheet and customer lot once data stored Germany. that customer country. of area seen residency a EU data became today. the for use of in believe there data country of certain doesn't to EU number a be their

in as well. have in resident data example, their have You scenario in a be government requirement well or a as EMEA, of country similar any all for Australia, customers that

quarters, strategy. are that as be to talk expand footprint we'll doing And so we natural the it Smartsheet And to in coming a a we're see about have going and grow and things key the Regions to -- believe our to extension. more we contributor as internationally,

Tyler Radke

ask looks at over in And metrics, guide raised. But in you could I quarter were raise outperformed Great. Certainly, most guide. like revenue million just you're if look same. operating billings I by operating But $XX a on follow-up income, if full year despite the your your the relative to keeping the the revenue, guidance. it

that's timing if curious related. just was I So

But most where any from. the T&E spend terms on get just coming pushed returning companies we've continues return seen to of for think kind budget I in that of to just offices out. is and color incremental

Pete Godbole

us. we ahead in So see of we are opportunity aggressively investing an

So of That's all we've how operated. we the thesis kind overperformance the you're across apply capital. seeing that's board. deltas And what the or into of investment been

We to million to, we've are to in investing that the $XX the op guided we're delta. income and committed $XX million

Mark Mader

negative. The

Pete Godbole

The negative.

Operator

is the with line question from Allan [Operator Instructions]. your Verkhovski And Research. of next Wolfe

Allan Verkhovski

think exciting How of it activity quarter? could Is to going how ask as I that federal forward? perspective, as And such was wanted anything I've to well follow-up. the linearity compare from pipeline got the terms be to a in progressed? periods does the upside an there in how prior there quick

Pete Godbole

we So saw real quarter no was quarter, the the so change linearity in there. previous consistent the very with

consistent. regions I both general, quarter and with We converted had pleased pipeline pipeline that as in think in how as pipeline quarter. segments well start the across generated the before similar we metrics seem were of very the

Allan Verkhovski

And you it getting of can churn get? that much And Or necessarily mentioned market? better what you're that it. result better. a gross Is that? how is you Got about had the driving is Could pursuing? also talk what

Pete Godbole

gross the X%. saw remarks, said dropped below prepared improve. we So it we churn In

think we're elements seeing X that. drive I

in COVID one the And about launched our mentions has in of churn. Ui the we what of The item lower second is down are a we're the significantly, And to seeing which for that the seeing first new platform, we a COVID. gone is year contributor we really ago, a that's first with accounts very customers were then Ui all is does is number hearing engaging, lot and level them. believe a our more item. The resonating

Operator

Mr. no And any you have do remarks, sir. further Turner, closing are there questions.

Aaron Turner

will Thank quarter. we speak Tabitha. you with next and again everyone Thanks, Great. joining today, you us for

Operator

conference Thank today's you participating. call. concludes This for

You disconnect. now may

Smartsheet (SMAR) 8 Sep 212022 Q2 Earnings call transcript