Smartsheet (SMAR) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue grew 20% year-over-year to $263 million, driven by strong subscription growth and enterprise customer expansion, with ARR reaching $1.056 billion, up 19% year-over-year.

• Net loss narrowed to $8.9 million from $29.9 million in the prior year, while non-GAAP net income rose to $44.4 million, or $0.32 per share.

• Customer base expanded, with customers over $100K ARR up 26% to 1,970 and those over $1 million ARR up 50% to 72.

• Major product launches included new AI tools, Timeline View, and upcoming Board and Table Views, enhancing platform usability.

• A $150 million share repurchase program was authorized, with no repurchases made during the quarter.

Financial highlights

• Subscription revenue increased 21% year-over-year to $249.1 million; professional services revenue was $13.9 million.

• Gross margin was 84% non-GAAP and 82% GAAP; subscription gross margin was 88%.

• Non-GAAP operating income was $42.1 million (16% margin); GAAP operating loss was $11.1 million (4% margin).

• Free cash flow was $45.7 million (17% of revenue), up 47% year-over-year.

• Dollar-based net retention rate was 114%; churn rate rounded down to 4%.

Outlook and guidance

• Q2 FY25 revenue expected between $273M–$275M; non-GAAP operating income $38M–$40M.

• FY25 revenue guidance raised to $1.116B–$1.121B (16%–17% growth); non-GAAP operating income $157M–$167M (14%–15% margin).

• FY25 ARR growth guidance increased to 14%–14.5%; free cash flow expected at $220M (20% margin).