Revenue and Growth - Annualized recurring revenue (ARR) increased to $1,133 million as of October 31, 2024, up from $981 million in the previous year[148]. - Average ARR per domain-based customer rose to $10,708, compared to $9,225 a year ago[148]. - The number of customers with ARR of $100,000 or more increased to 2,137, up from 1,779[148]. - Subscription revenue increased by $41.2 million, or 18%, for the three months ended October 31, 2024, compared to the same period in 2023, driven by capabilities-based products and user-based subscription plans[173]. - Total revenue for the three months ended October 31, 2024, was $286.9 million, representing a 17% increase from $245.9 million in the same period of 2023[172]. Profitability and Expenses - Gross profit for the three months ended October 31, 2024, was $233.1 million, a 17% increase from $198.9 million in the same period of 2023[179]. - Total operating expenses for the three months ended October 31, 2024, were $236.5 million, slightly up from $234.3 million in the same period of 2023[179]. - Net income for the three months ended October 31, 2024, was $1.3 million, compared to a net loss of $32.4 million in the same period of 2023[171]. - Subscription cost of revenue increased by $7.2 million, or 21%, for the three months ended October 31, 2024, primarily due to increased hosting fees and employee-related expenses[180]. - General and administrative expenses increased by $14.8 million, or 14%, primarily due to one-time acquisition-related costs[195]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended October 31, 2024, was $172.8 million, an increase of $74.6 million compared to $98.2 million for the same period in 2023[217]. - Net cash provided by investing activities during the nine months ended October 31, 2024, was $38.6 million, a change of $142.0 million from net cash used in investing activities of $103.4 million in 2023[218]. - Net cash used in financing activities for the nine months ended October 31, 2024, was $39.7 million, a decrease of $55.0 million compared to net cash provided by financing activities of $15.4 million in 2023, primarily due to share repurchases[219]. - The company authorized a stock repurchase program of up to $150.0 million, with $9.7 million spent on repurchasing 0.2 million shares at an average price of $46.05 per share during the three months ended October 31, 2024[213]. Future Outlook and Economic Factors - The company entered into a Merger Agreement with affiliates of Blackstone, Vista, and ADIA, with each share of Class A common stock to be converted into cash of $56.50[138][139]. - The Merger is expected to close in the fourth quarter of the fiscal year ending January 31, 2025, subject to customary closing conditions[143]. - The company anticipates operating expenses to increase in absolute dollars but decrease as a percentage of total revenue over the long term due to economies of scale[164]. - Macroeconomic conditions, including interest rate fluctuations and inflation, may significantly influence the company's results of operations[145]. Financial Position and Risks - Cash and cash equivalents amounted to $454.3 million, with short-term investments totaling $306.6 million as of October 31, 2024[206]. - Deferred revenue as of October 31, 2024, totaled $560.4 million, with $556.3 million expected to be recognized as revenue in the next 12 months[208]. - The company does not believe that a hypothetical increase of 100 basis points in interest rates would have a material impact on the value of its cash equivalents or short-term investments[227]. - The company has foreign currency risks related to revenue and expenses denominated in currencies other than the U.S. dollar, but does not expect a 10% change in currency value to materially affect operating results[228]. - The company may seek additional equity or debt financing in the future to meet capital requirements, which could affect its ability to compete successfully if not raised on acceptable terms[212].

Financial Performance - Total revenue for Q3 FY2025 was $286.9 million, a 17% increase year over year[2] - Annualized recurring revenue (ARR) grew 15% year over year to $1.133 billion[6] - Non-GAAP operating income was $56.4 million, representing 20% of total revenue, compared to 8% in Q3 FY2024[3] - GAAP net income was $1.3 million, a significant improvement from a net loss of $(32.4) million in Q3 FY2024[4] - Free cash flow was $61.8 million, or 22% of total revenue, compared to 5% in Q3 FY2024[5] - Total revenue for the three months ended October 31, 2024, was $286.9 million, a 16.6% increase from $245.9 million in the same period of 2023[22] - Subscription revenue reached $273.7 million for the three months ended October 31, 2024, compared to $232.5 million in the same period of 2023, reflecting a growth of 17.7%[22] - Gross profit for the nine months ended October 31, 2024, was $674.4 million, up from $561.4 million in the same period of 2023, representing a 20.1% increase[22] - Operating expenses totaled $236.5 million for the three months ended October 31, 2024, slightly up from $234.3 million in the same period of 2023[22] - Net income for the three months ended October 31, 2024, was $1.3 million, a significant improvement from a net loss of $32.4 million in the same period of 2023[22] Cash Flow and Assets - Cash and cash equivalents increased to $454.3 million as of October 31, 2024, compared to $282.1 million as of January 31, 2024[24] - Total assets reached $1.4 billion as of October 31, 2024, up from $1.3 billion as of January 31, 2024[24] - Deferred revenue was $556.3 million as of October 31, 2024, compared to $568.7 million as of January 31, 2024[24] - Net cash provided by operating activities for the nine months ended October 31, 2024, was $172.8 million, compared to $98.2 million in the same period of 2023[26] - Total net cash provided by operating activities was $63,528 for the three months ended October 31, 2024, compared to $15,146 in the same period of 2023[33] Customer Metrics - The dollar-based net retention rate was 111%[6] - The number of customers with ARR of $100,000 or more increased by 20% year over year to 2,137[6] - The average ARR per domain-based customer increased by 16% year over year to $10,708[6] Acquisition and Strategic Developments - Smartsheet entered into a definitive agreement to be acquired by Blackstone and Vista Equity Partners for approximately $8.4 billion[7] - Smartsheet unveiled a new user experience and features to enhance organizational performance[7] Non-GAAP Metrics - For the three months ended October 31, 2024, Smartsheet reported a non-GAAP operating income of $56,364, compared to $19,355 in the same period of 2023, reflecting a significant increase[30] - The non-GAAP operating margin improved to 20% for the three months ended October 31, 2024, up from 8% in the same period of 2023[30] - The company achieved a non-GAAP net income of $61,039 for the three months ended October 31, 2024, compared to a loss of $32,428 in the same period of 2023[31] - Non-GAAP net income per share, diluted, was $0.43 for the three months ended October 31, 2024, compared to $0.16 in the same period of 2023[31] - Smartsheet's free cash flow for the three months ended October 31, 2024, was $61,793, significantly up from $11,409 in the same period of 2023[33] Shareholder Information - The weighted-average shares outstanding, diluted, increased to 142,668 for the three months ended October 31, 2024, compared to 138,421 in the same period of 2023[33] Operational Costs - Share-based compensation expense for the nine months ended October 31, 2024, was $143.1 million, down from $153.4 million in the same period of 2023[26] - The company reported a loss from operations of $(3,351) for the three months ended October 31, 2024, an improvement from $(35,450) in the same period of 2023[30] - Smartsheet incurred one-time acquisition costs of $10,525 during the three months ended October 31, 2024[30] - The company’s amortization of acquisition-related intangible assets was $2,308 for the three months ended October 31, 2024, compared to $2,701 in the same period of 2023[31]

Lawsuit Details - Wohl & Fruchter LLP filed a class action lawsuit on November 14, 2024, in the United States District Court for the Southern District of New York on behalf of Smartsheet, Inc (NYSE: SMAR) stockholders as of October 25, 2024 [1] - The lawsuit asserts claims under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 regarding the proposed sale of Smartsheet to affiliates of Blackstone, Inc, Vista Equity Partners Management, LLC, and Platinum Falcon B 2018 RSC Limited [1] - The proposed sale involves a payment of $56.50 per share in cash to Smartsheet stockholders [1] Investor Notification - Smartsheet investors are notified that any member of the purported Class may move the Court to serve as lead plaintiff within 60 days after the date of this notice [2] - Investors can learn more about the class action lawsuit or inquire about their rights by completing a form on Wohl & Fruchter's website or contacting them via phone or email [2] About Wohl & Fruchter - Wohl & Fruchter LLP has over a decade of experience representing investors in litigation arising from fraud and corporate misconduct, recovering hundreds of millions of dollars in damages for investors [3] - The firm has offices in New York City and Monsey and can be contacted through their website, phone, or email [3]

Financial Performance - The company ended the quarter with annualized recurring revenues of $1.093 billion and more than 15.3 million users, with ARR growth of 17% year over year [2] - For Q3 fiscal 2025, the company expects revenues in the $282-$285 million range, suggesting year-over-year growth of 15-16% [7] - For fiscal 2025, revenues are projected to be between $1.17 billion and $1.18 billion, indicating a 14.2-14.5% increase year over year [8] Customer and Enterprise Growth - The company registered strong growth in the enterprise segment, with 75 customers increasing ARR by more than $100,000 and three transactions exceeding $1 million, including one over $4 million [1] - The number of customers with ARR of more than $1 million surged 50% year over year, totaling 77 [1] Product and AI Integration - The company announced a partnership with AWS to introduce a new AI-powered data connector that synchronizes data into Amazon Q Business, enhancing productivity and decision-making [3][4] - The connector enables seamless querying of project, program, and process information managed in Smartsheet, fostering a unified search experience across knowledge bases [4] Strategic Collaborations - The company's growing clientele includes key partners like Amazon, Microsoft, and Alphabet, which have been major growth drivers [5] - Collaboration with Alphabet includes deep integration with Google Apps for Work, enhancing productivity through features like Gmail and Calendar sync [5] - Integration with Microsoft Office 365 has streamlined work processes, improving productivity and collaboration across teams [6]

Stock Performance - Smartsheet shares have risen 8 6% over the past month and hit a new 52-week high of $55 63 [1] - The stock has gained 16 3% since the start of the year compared to the Zacks Computer and Technology sector's 25 2% and the Zacks Internet - Software industry's 24 4% [1] Earnings and Revenue - Smartsheet has not missed earnings consensus estimates in the last four quarters [2] - In the last earnings report on September 5 2024 Smartsheet reported EPS of $0 44 versus consensus estimate of $0 29 and beat the consensus revenue estimate by 0 86% [2] - For the current fiscal year Smartsheet is expected to post earnings of $1 39 per share on $1 12 billion in revenues representing a 63 53% change in EPS and a 16 74% change in revenues [3] - For the next fiscal year the company is expected to earn $1 55 per share on $1 28 billion in revenues representing year-over-year changes of 11 4% and 14 63% respectively [3] Valuation Metrics - Smartsheet has a Value Score of F Growth Score of A and Momentum Score of A resulting in a VGM Score of B [6] - The stock trades at 40X current fiscal year EPS estimates a premium to the peer industry average of 31 5X [7] - On a trailing cash flow basis the stock trades at 5X versus its peer group's average of 24 2X [7] - The stock has a PEG ratio of 1 27 [7] Zacks Rank and Style Scores - Smartsheet currently has a Zacks Rank of 2 (Buy) due to favorable earnings estimate revisions [8] - The company fits the criteria of having a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B [8] Industry Comparison - Meta Platforms Inc (META) a peer in the industry has a Zacks Rank of 2 (Buy) Value Score of C Growth Score of B and Momentum Score of A [9] - Meta Platforms Inc beat the consensus estimate by 9 79% last quarter and is expected to post earnings of $21 36 per share on revenue of $161 62 billion for the current fiscal year [10] - Meta Platforms Inc shares have gained 17 5% over the past month and trade at a forward P/E of 27 75X and a P/CF of 30 06X [10] - The Internet - Software industry is in the top 29% of all industries indicating favorable conditions for Smartsheet and Meta Platforms Inc [11]

Core Viewpoint - Halper Sadeh LLC is investigating the fairness of the sale of Smartsheet Inc. to Blackstone and Vista Equity Partners for $56.50 per share in cash, focusing on the rights of Smartsheet shareholders [1][2]. Group 1: Investigation Details - The investigation examines whether Smartsheet and its board violated federal securities laws and fiduciary duties by not securing the best possible consideration for shareholders [2]. - Concerns include whether Blackstone and Vista are underpaying for Smartsheet and if all material information necessary for shareholders to assess the merger was disclosed [2]. Group 2: Potential Actions - Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures, and other forms of relief related to the proposed transaction [3]. - The firm operates on a contingent fee basis, meaning shareholders would not incur out-of-pocket legal fees or expenses [3]. Group 3: Firm Background - Halper Sadeh LLC represents global investors affected by securities fraud and corporate misconduct, having recovered millions for defrauded investors [4].

Core Insights - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher [1] - The Zacks Momentum Style Score helps investors identify stocks with strong momentum, addressing the challenge of defining momentum [2] Company Overview: Smartsheet (SMAR) - Smartsheet currently holds a Momentum Style Score of A, indicating strong momentum characteristics [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance [4] Performance Metrics - Over the past week, Smartsheet shares increased by 7.58%, significantly outperforming the Zacks Internet - Software industry, which rose by only 0.29% [6] - In a longer timeframe, Smartsheet's shares have risen by 28.87% over the past quarter and 39.42% over the last year, compared to the S&P 500's increases of 4.59% and 34.78%, respectively [7] Trading Volume - The average 20-day trading volume for Smartsheet is 6,855,747 shares, indicating a strong trading interest [8] Earnings Outlook - In the past two months, 7 earnings estimates for Smartsheet have been revised upwards, while none have been revised downwards, raising the consensus estimate from $1.26 to $1.39 [10] - For the next fiscal year, 5 estimates have increased, while 2 have decreased, indicating a generally positive outlook [10]

Core Viewpoint - Johnson Fistel, LLP is investigating potential breaches of fiduciary duties by Smartsheet's board in relation to the proposed acquisition by Blackstone and Vista Equity Partners, which offers shareholders $56.50 per share in an all-cash transaction [1][2][3]. Group 1 - Smartsheet has accepted an acquisition proposal from Blackstone and Vista Equity Partners, with shareholders set to receive $56.50 per share [2]. - The investigation by Johnson Fistel focuses on whether Smartsheet's board adequately explored alternatives to the acquisition and secured the best possible price for shareholders [3]. - Analyst projections for Smartsheet's earnings and revenue growth indicate that the company's shares have historically traded at higher prices, raising questions about the fairness of the acquisition offer [3].

Group 1 - Monteverde & Associates PC is investigating Smartsheet Inc. regarding its proposed merger with Einstein Parent, Inc., where Smartsheet shareholders will receive $56.50 in cash per share [1] - Monteverde & Associates PC has been recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report, indicating its successful track record in recovering money for shareholders [1] - The firm operates from the Empire State Building in New York City and specializes in class action securities litigation [2] Group 2 - The firm encourages shareholders with concerns to contact them for additional information, emphasizing that no company, director, or officer is above the law [3] - Monteverde & Associates PC has a successful history in trial and appellate courts, including the U.S. Supreme Court, showcasing its legal expertise [2]

Group 1 - Smartsheet has agreed to be acquired by Blackstone and Vista Equity Partners for $8.4 billion, offering investors $56.50 per share, which is an 8.5% premium over the previous closing price [1][2] - The acquisition represents a 41% premium to the volume weighted average closing price for the 90 days leading up to July 17, prior to media reports about a potential sale [1] - Following the announcement, Smartsheet shares increased by more than 6%, reaching their highest levels since early 2022 [2] Group 2 - The merger aims to enhance Smartsheet's platform accessibility for all organizations and teams that rely on collaborative work for successful outcomes, according to Vista Equity Partners directors [2] - Smartsheet has a 45-day "go-shop" period to seek other potential buyers before the transaction is finalized, which is expected to close on January 31 [1]