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Smartsheet Idea Proposal (SMAR)

Smartsheet Idea Proposal (SMAR)
 

Does Smartsheet offer a unique approach to simplifying project management or is the market crowded with fungible solutions?

Report Available: September 27, 2019

 

Blueshift’s initial research found investors reacting positively to SMAR’s impressive revenue growth. However, the company raised some eyebrows with its Q3 guidance, which included an increase in spending and a wider-than-expected loss. SMAR has more than 80,000 customers but fewer than 10% pay as much as $5,000 per year for its software. SMAR’s project management tools have a host of competitors that offer at least some of the same functions, and it is not clear whether the company can stand out from the crowd.

 

Observations

  1. Shares of SMAR, a developer of cloud-based project management software, have more than doubled since its April 2018 IPO. The company remains unprofitable after 14 years in operation, but its revenue has been growing at an impressive clip of about 60% for each of the past three fiscal years, topping $177 million for the year ending Jan. 31. Its subscription-based software offering is aimed at helping companies better manage team-oriented projects, making it easy to pull information from numerous sources into a central spreadsheet.
  2. Shares of SMAR fell almost 10% on Sept. 4 after the company’s Q2 earnings report. SMAR’s 53% year-over-year jump in revenue was slightly below analyst estimates, and the loss it forecast for Q3 was wider than anticipated. The company said expenses were growing because it was moving up some of its investments in its international sales team, its migration to the cloud, and in brand marketing.
  3. SMAR boasted 5.4 million total users across 82,000 companies at the end of Q2, though SMAR has just a small presence within many of those customers. Only 226 companies pay more than $100,000 per year and less than 8,000 pay more than $5,000 per year. SMAR only requires team members that will be actively updating worksheets to pay a license fee, while other team members can access certain features for free as “collaborators.” SMAR charges about $15-$25 per license per month, depending on the plan. The company also has rolled out “Accelerators,” pre-built templates for specific use cases that subscribers can purchase. The company’s dollar-based net retention rate, a measure of whether existing customers are increasing spending with the platform, was an impressive 134% in Q2.
  4. A key issue for SMAR is where it sits in a sea of software options around project, team and workflow management. Competitors include Asana, Airtable, Wrike, Monday.com, TEAM’s Trello and many others. In its most recent look at collaborative work management tools for the enterprise, Forrester listed SMAR as among the top three vendors, praising its data management, AI capabilities, and business-oriented workflow design. Software Advice, a Gartner company, also included SMAR in its overview of project management software vendors, though it placed the company toward the bottom of a very large pack of competitors.

 

Why are customers choosing SMAR? What pain points is it removing in the project management workflow? Does it have a killer feature that makes it indispensable? Who are its true competitors? Is SMAR offering something unique in the marketplace? How sticky is it once teams start to use it? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Smartsheet customers, Competitor customers, Competitors, and Industry specialists.  

 

 

Companies: Smartsheet Inc. (SMAR), Alphabet Inc. (GOOG/GOOGL), Atlassian Corp. plc (TEAM), Microsoft Corp. (MSFT)

 

Research Begins: September 9, 2019

 

To see other ideas Blueshift Research is currently working on, please click here.

 

 

Blueshift Research’s sister company, Intro-act, has launched the Intro-act Scorecard, the C-suite’s standard, ongoing measure of corporate investor engagement.

 

The Scorecard optimizes the ROI on corporate access by measuring: Concentration, Directionality, Breadth, Impact, Depth, and Duration

 

See the sample Scorecard. Watch the Scorecard video.