NEWS RELEASE

# Smartsheet Inc. Announces Second Quarter Fiscal Year 2024 Results

9/7/2023

Second quarter total revenue grew 26% year over year to $235.6 million

Second quarter operating cash îow of $48.5 million and free cash îow of $45.5 million

Ended the quarter with cash, cash equivalents, and short-term investments of $549.0 million

BELLEVUE, Wash.--(BUSINESS WIRE)-- Smartsheet Inc. (NYSE: SMAR), the enterprise platform for modern work

management, today announced ínancial results for its second íscal quarter ended July 31, 2023.

“Smartsheet outperformed across all aspects of our guidance in Q2,” said Mark Mader, CEO of Smartsheet. “Our

platform’s scalability continues to drive strong demand from enterprises looking for solutions to manage their

mission-critical work securely and consistently. We remain focused on delivering innovation around generative AI

and other areas to help our customers achieve more and to extend our leadership position in the enterprise work

management market.”

Second Quarter Fiscal 2024 Financial Highlights

Revenue: Total revenue was $235.6 million, an increase of 26% year over year. Subscription revenue was

$221.5 million, an increase of 28% year over year. Professional services revenue was $14.1 million, an

increase of 7% year over year.

Operating Income (Loss): GAAP operating loss was $(36.1) million, or (15)% of total revenue, compared to

$(64.9) million, or (35)% of total revenue, in the second quarter of íscal 2023. Non-GAAP operating income

was $19.2 million, or 8% of total revenue, compared to non-GAAP operating loss of $(16.1) million, or (9)% of


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total revenue, in the second quarter of íscal 2023.

Net Income (Loss): GAAP net loss was $(33.4) million, compared to GAAP net loss of $(62.3) million in the

second quarter of íscal 2023. GAAP net loss per share was $(0.25), compared to GAAP net loss per share of

$(0.48) in the second quarter of íscal 2023. Non-GAAP net income was $22.0 million, compared to non-GAAP

net loss of $(13.5) million in the second quarter of íscal 2023. Non-GAAP basic and diluted net income per

share was $0.16, compared to non-GAAP basic and diluted net loss per share of $(0.10) in the second quarter

of íscal 2023.

Cash Flow: Netoperating cash îow was $48.5 million, compared to $10.2 million in the second quarter of íscal

2023. Free cash îow was $45.5 million, or 19% of total revenue, compared to $7.1 million, or 4% of total

revenue, in the second quarter of íscal 2023.

Second Quarter Fiscal 2024 Operational Highlights

Calculated billings were $243.1 million, representing year-over-year growth of 18%

Dollar-based net retention rate was 121%

Number of all customers with annualized contract values ("ACV") of $100,000 or more grew to 1,665, an

increase of 36% year over year

Number of all customers with ACV of $50,000 or more grew to 3,552, an increase of 30% year over year

Number of all customers with ACV of $5,000 or more grew to 19,031, an increase of 14% year over year

Average ACV per domain-based customer increased to $8,863, an increase of 17% year over year

Second Quarter Fiscal 2024 Business Highlights

[Released new generative AI capabilities to select customers in private beta that give them powerful insights](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.smartsheet.com%2Fai&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=new+generative+AI+capabilities&index=1&md5=903cec4e84a63cd6da68c0651599f2d6)

and help them quickly build sophisticated solutions

[Strengthened Smartsheet's enterprise platform scale and performance systems with computational feature](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.smartsheet.com%2Fcontent-center%2Fproduct-insights%2Fproduct-updates%2Fsmartsheet-focus-scale-reliability&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=scale+and+performance+systems&index=2&md5=5e93f2d5e7235561ae184c84a19237fe)

enhancements and increasing cross-sheet cell linking capacity from 30,000 to 500,000 per sheet, enabling

customers to build larger-scale solutions and manage more interconnected projects and portfolios

[Recognized as a 2023 Gartner Peer Insights™ Customers’ Choice for the Collaborative Work Management](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.gartner.com%2Fdoc%2Freprints%3Fid%3D1-2EB088QG%26ct%3D230628%26st%3Dsb&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=2023+Gartner+Peer+Insights%26%238482%3B+Customers%26%238217%3B+Choice&index=3&md5=e4f0b107905f3b7c72e47f75d7f2b0fb)

market1

[Recognized as a vendor who shaped the collaboration applications market in 2022 in IDC’s Worldwide](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.idc.com%2Fgetdoc.jsp%3FcontainerId%3DUS51018123&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=IDC%26%238217%3Bs+Worldwide+Collaborative+Applications+Market+Shares%2C+2022%3A+The+Rise+of+the+Multiplayer+Enterprise+report&index=4&md5=2ef64a23b5fabd59b1b7d66ac57ad9e2)

[Collaborative Applications Market Shares, 2022: The Rise of the Multiplayer Enterprise report2](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.idc.com%2Fgetdoc.jsp%3FcontainerId%3DUS51018123&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=IDC%26%238217%3Bs+Worldwide+Collaborative+Applications+Market+Shares%2C+2022%3A+The+Rise+of+the+Multiplayer+Enterprise+report&index=4&md5=2ef64a23b5fabd59b1b7d66ac57ad9e2)

The section titled "Use of Non-GAAP Financial Measures" below contains a description of the non-GAAP ínancial

measures with a reconciliation between GAAP and non-GAAP information. The section titled "Deínitions of

Business Metrics" contains deínitions of certain non-ínancial metrics provided within this earnings release.


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Financial Outlook

For the third quarter of íscal year 2024, the Company currently expects:

Total revenue of $240 million to $242 million, representing year-over-year growth of 20% to 21%

Non-GAAP operating income of $8 million to $10 million

Non-GAAP net income per share of $0.08 to $0.09, assuming diluted weighted-average shares outstanding of

approximately 139.0 million

For the full íscal year 2024, the Company currently expects:

Total revenue of $950 million to $953 million, representing year-over-year growth of 24%

Non-GAAP operating income of $62 million to $67 million

Non-GAAP net income per share of $0.53 to $0.57, assuming diluted weighted-average shares outstanding of

approximately 139.0 million

Calculated billings year-over-year growth of 20%

Free cash îow of $120 million

We have not reconciled free cash îow guidance to net cash from operating activities because we do not provide

guidance on the reconciling items between net cash from operating activities and free cash îow, due to the

uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items will

have a signiícant impact on our free cash îow. Accordingly, a reconciliation of net cash from operating activities to

free cash îow guidance is not available without unreasonable eìort. We do not provide reconciliation of calculated

billings guidance as its components are solely revenue and deferred revenue, and guidance for revenue is already

provided.

_____________________

1 Gartner, Voice of the Customer for Collaborative Work Management, June 2023. Gartner and Peer Insights™ are trademarks of Gartner, Inc. and/or

its aïliates. All rights reserved. Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences, and
should not be construed as statements of fact, nor do they represent the views of Gartner or its aïliates. Gartner does not endorse any vendor,
product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or
completeness, including any warranties of merchantability or ítness for a particular purpose.

2 Doc #: US51018123, publish date: July 2023

Conference Call Information

Smartsheet will host a conference call and live webcast for analysts and investors at 1:30 p.m. Paciíc Time on

September 7, 2023. A live webcast and accompanying presentation can be accessed on the Investor Relations

[section of the Company's website at: https://investors.smartsheet.com. The conference call can also be accessed](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Finvestors.smartsheet.com%2F&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=https%3A%2F%2Finvestors.smartsheet.com&index=5&md5=d4941aa49dcbac2c56ed9b5341f15e04)


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by dialing (888) 440-6385, or +1 (646) 960-0180 (outside of the US). The conference ID is 7672979. A replay of the

[call via webcast will be available at https://investors.smartsheet.com or by dialing (800) 770-2030 or +1 (647) 362-](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Finvestors.smartsheet.com%2F&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=https%3A%2F%2Finvestors.smartsheet.com&index=6&md5=b2a7e0ec6825bdae10763b4b8ef8e915)

9199 (outside of the US). The dial-in replay will be available until the end of day on September 14, 2023. The

webcast replay will be available for one year.

Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our management’s beliefs and

assumptions and on information currently available to management. Forward-looking statements include, but are

not limited to, statements about Smartsheet’s outlook for the third íscal quarter ending October 31, 2023, and the

full íscal year ending January 31, 2024, and Smartsheet’s expectations regarding possible or assumed business

strategies, potential growth and innovation opportunities, new products, and potential market opportunities.

Forward-looking statements generally relate to future events or our future ínancial or operating performance.

Forward-looking statements include all statements that are not historical facts and can be identiíed by terms such

as “believe,” “continue,” “could,” “potential,” “remain,” “will,” “would,” or similar expressions and the negatives of

those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that

may cause our actual results, performance or achievements to be materially diìerent from any future results,

performance or achievements expressed or implied by the forward-looking statements. These risks include, but are

not limited to, risks and uncertainties related to: our ability to achieve future growth and sustain our growth rate;

our ability to attract and retain customers and increase sales to our customers; our ability to develop and release

new products and services and to scale our platform; our ability to increase adoption of our platform through our

self-service model; our ability to maintain and grow our relationships with strategic partners; the highly competitive

and rapidly evolving market in which we participate; our ability to identify targets for, execute on, or realize the

beneíts of, potential acquisitions; and our international expansion strategies. Further information on risks that

could cause actual results to diìer materially from forecasted results is included in our ílings with the SEC,

including our Quarterly Report on Form 10-Q for the quarter ended July 31, 2023 to be íled with the SEC. Any

forward-looking statements contained in this press release are based on assumptions that we believe to be

reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking

statements, or to update the reasons if actual results diìer materially from those anticipated in the forward-looking

statements.

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated ínancial statements, which are prepared and presented in accordance

with GAAP, we use certain non-GAAP ínancial measures, as described below, to understand and evaluate our core

operating performance. These non-GAAP ínancial measures, which may be diìerent than similarly titled measures


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used by other companies, are presented to enhance investors’ overall understanding of our ínancial performance

and should not be considered a substitute for, or superior to, the ínancial information prepared and presented in

accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their

most directly comparable GAAP ínancial measures. A reconciliation of the non-GAAP ínancial measures to such

GAAP measures can be found in the accompanying ínancial statements included with this press release.

We believe that these non-GAAP ínancial measures provide useful information about our ínancial performance,

enhance the overall understanding of our past performance and future prospects, and allow for greater

transparency with respect to important metrics used by our management for ínancial and operational decision
making. We are presenting these non-GAAP ínancial metrics to assist investors in seeing our ínancial performance

through the eyes of management, and because we believe that these measures provide an additional tool for

investors to use in comparing our core ínancial performance over multiple periods with other companies in our

industry.

We deíne non-GAAP operating income (loss) as GAAP operating loss excluding share-based compensation expense,

amortization of acquisition-related intangible assets, one-time costs associated with mergers and acquisitions,

lease restructuring costs, and litigation expenses and settlements related to matters that are outside the ordinary

course of our business, as applicable. We deíne non-GAAP net income (loss) as GAAP net loss excluding non
recurring income tax adjustments associated with mergers and acquisitions and the same exclusions that are used

to derive non-GAAP operating income (loss). We deíne basic non-GAAP net income (loss) per share as non-GAAP

net income (loss) divided by weighted-average shares outstanding ("WASO"). We deíne diluted non-GAAP net

income per share as non-GAAP net income divided by diluted WASO. Diluted WASO includes the impact of

potentially dilutive securities, which include stock options, restricted share units, performance share units, and

shares subject to our 2018 employee stock purchase plan. If there is a non-GAAP net loss, basic and diluted loss per

share are the same number as all potentially dilutive securities would have an antidilutive impact. There are a

number of limitations related to the use of these non-GAAP measures as compared to GAAP operating loss and net

loss, including that the non-GAAP measures exclude share-based compensation expense, which has been, and will

continue to be for the foreseeable future, a signiícant recurring expense in our business and an important part of

our compensation strategy.

We use the non-GAAP ínancial measure of free cash îow, which is deíned as GAAP net cash îows from operating

activities, reduced by cash used for purchases of property and equipment (inclusive of spend on internal-use

software). We believe free cash îow is an important liquidity measure of the cash that is available, after capital

expenditures and operational expenses, for investment in our business and to make acquisitions. Free cash îow is

useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our

business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future


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growth. There are a number of limitations related to the use of free cash îow as compared to net cash from

operating activities, including that free cash îow includes capital expenditures, the beneíts of which are realized in

periods subsequent to those when expenditures are made.

We deíne calculated billings as total revenue plus the change in deferred revenue in the period. Because we

recognize subscription revenue ratably over the subscription term, calculated billings can be used to measure our

subscription sales activity for a particular period, to compare subscription sales activity across particular periods,

and as an indicator of future subscription revenue.

Deínitions of Business Metrics

Average ACV per domain-based customer

We deíne average ACV per domain-based customer as total outstanding ACV for domain-based subscriptions as of

the end of the reporting period divided by the number of domain-based customers as of the same date. We deíne

domain-based customers as organizations with a unique email domain name.

Dollar-based net retention rate

We calculate dollar-based net retention rate as of a period end by starting with the ACV from the cohort of all

customers as of the 12 months prior to such period end, or prior period ACV. We then calculate the ACV from these

same customers as of the current period end, or current period ACV. Current period ACV includes any upsells and is

net of contraction or attrition over the trailing 12 months, but excludes subscription revenue from new customers

in the current period. We then divide the total current period ACV by the total prior period ACV to arrive at the

dollar-based net retention rate. Any ACV obtained through merger and acquisition transactions does not aìect the

dollar-based net retention rate until one year from the date on which the transaction closed.

About Smartsheet

Smartsheet (NYSE: SMAR) is the enterprise work management platform. The foundation for managing projects,

programs, and processes for millions of global customers, Smartsheet empowers everyone to work better, at scale.

[Visitwww.smartsheet.com to learn more.](https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.smartsheet.com%2Fcustomers-home&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=www.smartsheet.com&index=7&md5=ab6d01fa846877a8a4ca515f75c6081f)

Disclosure of Material Information

Smartsheet announces material information to its investors using SEC ílings, press releases, public conference

[calls, and on its investor relations page of the company’s website at https://investors.smartsheet.com.](https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Finvestors.smartsheet.com&esheet=53550824&newsitemid=20230907647435&lan=en-US&anchor=https%3A%2F%2Finvestors.smartsheet.com&index=8&md5=583f72db3c6787a067de30bc2821f5bf)


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SMARTSHEET INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Three Months Ended July 31, Six Months Ended July 31,

2023 2022 2023 2022

Revenue

|Col1|Col2|Col3|Col4|
|---|---|---|---|


Subscription $ 221,522 $ 173,533 $ 427,523 $ 328,809

|14,063|13,158|27,948|26,192|
|---|---|---|---|



Total revenue 235,585 186,691 455,471 355,001

Cost of revenue

|Col1|Col2|Col3|Col4|
|---|---|---|---|


Subscription 33,584 27,722 66,751 52,860

|13,454|12,829|26,168|24,849|
|---|---|---|---|



Total cost of revenue 47,038 40,551 92,919 77,709

|188,547|146,140|362,552|277,292|
|---|---|---|---|



Operating expenses

Research and development 58,358 53,784 114,548 106,303

Sales and marketing 129,813 124,015 244,765 239,406

|36,523|33,200|71,501|66,244|
|---|---|---|---|



Total operating expenses 224,694 210,999 430,814 411,953

|(36,147)|(64,859)|(68,262)|(134,661)|
|---|---|---|---|



Interest income 5,847 1,281 11,064 1,669

|(55)|1,624|(591)|796|
|---|---|---|---|



Loss before income tax provision (30,355) (61,954) (57,789) (132,196)

|3,002|359|5,438|574|
|---|---|---|---|



Net loss $ (33,357) $ (62,313) $ (63,227) $ (132,770)

|$ (0.25)|$ (0.48)|$ (0.47)|$ (1.03)|
|---|---|---|---|



Weighted-average shares outstanding used to compute net loss per
share, basic and diluted 133,829 129,645 133,196 129,091

Share-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands, unaudited):

Three Months Ended July 31, Six Months Ended July 31,

2023 2022 2023 2022

|$ 3,357|$ 2,849|$ 6,816|$ 5,460|
|---|---|---|---|



Cost of professional services revenue 1,915 1,756 3,825 3,233

Research and development 17,611 15,974 35,043 31,589

Sales and marketing 18,989 16,707 38,043 31,452

|10,151|8,202|20,075|17,654|
|---|---|---|---|



Total share-based compensation expense $ 52,023 $ 45,488 $ 103,802 $ 89,388

SMARTSHEET INC.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)

January 31,

July 31, 2023 2023

Assets

Current assets

Cash and cash equivalents $ 237,278 $ 223,156

Short-term investments 311,707 233,225

Accounts receivable, net of allowances of $5,248 and $6,285, respectively 156,492 198,643

Prepaid expenses and other current assets 54,904 55,063

Total current assets 760,381 710,087

Restricted cash 193 197

Deferred commissions 136,248 121,785

P t d i t t 40 262 39 395


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Property and equipment, net 40,262 39,395

Operating lease right-of-use assets 46,922 54,278

Intangible assets, net 33,442 39,069

Goodwill 141,723 142,415

Other long-term assets 3,595 2,983

Total assets $ 1,162,766 $ 1,110,209

Liabilities and shareholders’ equity

Current liabilities

Accounts payable $ 1,502 $ 2,125

Accrued compensation and related beneíts 66,181 68,347

Other accrued liabilities 35,135 27,437

Operating lease liabilities, current 17,597 19,220

Deferred revenue 461,239 457,534

Total current liabilities 581,654 574,663

Operating lease liabilities, non-current 40,068 47,564

Deferred revenue, non-current 1,679 2,195

Other long-term liabilities 343 129

Total liabilities 623,744 624,551

Shareholders’ equity

Preferred stock, no par value; 10,000,000 shares authorized, no shares issued or outstanding as of July 31,
2023 and January 31, 2023 — —

Class A common stock, no par value; 500,000,000 shares authorized, 134,499,892 shares issued and
outstanding as of July 31, 2023; 500,000,000 shares authorized, 131,845,028 shares issued and
outstanding as of January 31, 2023 — —

Class B common stock, no par value; 500,000,000 shares authorized, no shares issued and outstanding as
of July 31, 2023; 500,000,000 shares authorized, no shares issued and outstanding as of January 31, 2023 — —

Additional paid-in capital 1,360,851 1,243,730

Accumulated other comprehensive income (loss) (429) 101

Accumulated deícit (821,400) (758,173)

Total shareholders’ equity 539,022 485,658

Total liabilities and shareholders’ equity $ 1,162,766 $ 1,110,209

SMARTSHEET INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Six Months Ended July 31,

2023 2022

Cash îows from operating activities

Net loss $ (63,227) $ (132,770)

Adjustments to reconcile net loss to net cash provided by operating activities:

Share-based compensation expense 103,802 89,388

Depreciation and amortization 13,191 12,239

Net amortization of premiums (discounts) on investments (4,845) (402)

Amortization of deferred commission costs 24,378 27,567

Unrealized foreign currency loss 483 423

Non-cash operating lease costs 6,322 7,905

Other, net 1,674 (1,587)

Changes in operating assets and liabilities:

Accounts receivable 40,433 20,357

Prepaid expenses and other current assets 49 (3,804)

Other long-term assets (798) (131)

Accounts payable (602) 2,002

Other accrued liabilities 8,000 6,965

Accrued compensation and related beneíts (2,337) (8,773)

Deferred commissions (38,840) (36,994)

Deferred revenue 3,183 30,653

Other long-term liabilities 216 —

Operating lease liabilities (8,052) (7,870)

Net cash provided by operating activities 83,030 5,168

Cash îows from investing activities

Purchases of short-term investments (248,480) (297,844)

Maturities of short-term investments 174,900 69,548

Proceeds from liquidation of a long-term investment — 622

Purchases of property and equipment (1,395) (3,007)

Proceeds from sale of property and equipment 27 94

Capitalized internal-use software development costs (4,815) (4,121)

Net cash used in investing activities (79,763) (234,708)

Cash îows from ínancing activities

Proceeds from exercise of stock options 1,070 3,649

Taxes paid related to net share settlement of restricted stock units (1,150) (2,513)

Proceeds from contributions to Employee Stock Purchase Plan 10,846 7,836

Net cash provided by ínancing activities 10,766 8,972

Eì f h i f i h h h i l d i d h 6 (1 225)


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Eìects of changes in foreign currency exchange rates on cash, cash equivalents, and restricted cash 6 (1,225)

Net increase (decrease) in cash, cash equivalents, and restricted cash 14,039 (221,793)

Cash, cash equivalents, and restricted cash at beginning of period 223,757 449,680

Cash, cash equivalents, and restricted cash at end of period $ 237,796 $ 227,887

Supplemental disclosures

Cash paid for income tax $ 6,186 $ 191

Accrued purchases of property and equipment, including internal-use software 1,255 939

Share-based compensation expense capitalized in internal-use software development costs 2,065 1,747

Right-of-use assets obtained in exchange for new operating lease liabilities — 4,464

Right-of-use asset reductions related to operating leases 1,033 110

SMARTSHEET INC.

Reconciliation from GAAP to Non-GAAP Financial Measures

(unaudited)

Reconciliation from GAAP to non-GAAP operating income (loss) and operating margin

Three Months Ended July 31, Six Months Ended July 31,

2023 2022 2023 2022

(dollars in thousands)

Loss from operations $ (36,147) $ (64,859) $ (68,262) $ (134,661)

Add:

Share-based compensation expense(1) 52,549 45,836 104,749 90,064

Amortization of acquisition-related intangible assets(2) 2,707 2,484 5,416 4,967

One-time acquisition costs — 461 — 461

Lease restructuring costs(3) 110 — 116 —

|$ 19,219|$ (16,078)|$ 42,019|$ (39,169)|
|---|---|---|---|



Operating margin (15)% (35)% (15)% (38)%

Non-GAAP operating margin 8% (9)% 9% (11)%

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.
(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting. The amortization of intangible assets
related to acquisitions will recur in future periods until such intangible assets have been fully amortized.
(3) Includes charges related to the reassessment of our real estate lease portfolio.

Reconciliation from GAAP to non-GAAP net income (loss) and per share data

Three Months Ended July 31, Six Months Ended July 31,

2023 2022 2023 2022

(in thousands, except per share data)

Net loss $ (33,357) $ (62,313) $ (63,227) $ (132,770)

Add:

Share-based compensation expense(1) 52,549 45,836 104,749 90,064

Amortization of acquisition-related intangible assets(2) 2,707 2,484 5,416 4,967

One-time acquisition costs — 461 — 461

Lease restructuring costs(3) 110 — 116 —

|$ 22,009|$ (13,532)|$ 47,054|$ (37,278)|
|---|---|---|---|



Non-GAAP net income (loss) per share, basic $ 0.16 $ (0.10) $ 0.35 $ (0.29)

Non-GAAP net income (loss) per share, diluted $ 0.16 $ (0.10) $ 0.34 $ (0.29)

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.
(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting. The amortization of intangible assets
related to acquisitions will recur in future periods until such intangible assets have been fully amortized.
(3) Includes charges related to the reassessment of our real estate lease portfolio.

SMARTSHEET INC.

R ili ti f GAAP t N GAAP Fi i l M 9


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Reconciliation from GAAP to Non-GAAP Financial Measures

(unaudited)

Non-GAAP reconciliation from basic to diluted weighted-average shares outstanding

Three Months Ended July 31, Six Months Ended July 31,

2023 2022 2023 2022

(in thousands)

Weighted-average shares outstanding; basic 133,829 129,645 133,196 129,091

Eìect of dilutive securities:

|3,541|—|3,864|—|
|---|---|---|---|



Non-GAAP weighted-average shares outstanding; diluted 137,370 129,645 137,060 129,091

Reconciliation from net operating cash îow to free cash îow

Three Months Ended July 31, Six Months Ended July 31,

2023 2022 2023 2022

(in thousands)

Net cash provided by operating activities $ 48,459 $ 10,221 $ 83,030 $ 5,168

Less:

Purchases of property and equipment (542) (1,316) (1,395) (3,007)

Capitalized internal-use software development costs (2,418) (1,798) (4,815) (4,121)

|$ 45,499|$ 7,107|$ 76,820|$ (1,960)|
|---|---|---|---|



Reconciliation from revenue to calculated billings

Three Months Ended July 31, Six Months Ended July 31,

2023 2022 2023 2022

(in thousands)

Total revenue $ 235,585 $ 186,691 $ 455,471 $ 355,001

Add:

Deferred revenue (end of period) 462,918 365,346 462,918 365,346

Less:

|455,362|346,423|459,729|334,662|
|---|---|---|---|



Calculated billings $ 243,141 $ 205,614 $ 458,660 $ 385,685

SMARTSHEET INC.

Reconciliation from GAAP to Non-GAAP Financial Measures

(unaudited)

Reconciliation from GAAP operating loss to non-GAAP operating income guidance

Q3 FY 2024 FY 2024

Low High Low High

(in millions)

Loss from operations $ (49.2) $ (47.2) $ (168.0) $ (163.0)

Add:

Share-based compensation expense(1) 52.0 52.0 215.0 215.0

Amortization of acquisition-related intangible assets(2) 2.7 2.7 10.9 10.9

|2.5|2.5|4.1|4.1|
|---|---|---|---|



Non-GAAP operating income $ 8.0 $ 10.0 $ 62.0 $ 67.0

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.
(2) C i t ti l f ti ti f i t ibl t th t d d t f h ti Th ti ti f i t ibl t

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(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting. The amortization of intangible assets
related to acquisitions will recur in future periods until such intangible assets have been fully amortized.
(3) Includes charges related to the reassessment of our real estate lease portfolio.

Reconciliation from GAAP net loss to non-GAAP net income guidance

Q3 FY 2024 FY 2024

Low High Low High

(in millions)

Net loss $ (46.2) $ (44.2) $ (156.0) $ (151.0)

Add:

Share-based compensation expense(1) 52.0 52.0 215.0 215.0

Amortization of acquisition-related intangible assets(2) 2.7 2.7 10.9 10.9

|2.5|2.5|4.1|4.1|
|---|---|---|---|



Non-GAAP net income $ 11.0 $ 13.0 $ 74.0 $ 79.0

(1) Includes amortization related to share-based compensation that was capitalized in internal-use software and other assets in previous periods.
(2) Consists entirely of amortization of intangible assets that were recorded as part of purchase accounting. The amortization of intangible assets
related to acquisitions will recur in future periods until such intangible assets have been fully amortized.
(3) Includes charges related to the reassessment of our real estate lease portfolio.

Smartsheet Inc.
Investor Relations Contact

Aaron Turner

[investorrelations@smartsheet.com](mailto:investorrelations@smartsheet.com)

Media Contact

Chrissy Vaughn

[pr@smartsheet.com](mailto:pr@smartsheet.com)

Source: Smartsheet

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