Smartsheet Inc.

Ladies and gentlemen, good afternoon and thank you for standing by. My name is Abby and I will be your conference operator today. At this time I would like to welcome everyone to the Smartsheet first quarter fiscal 2025 earnings conference call. All lines have been placed on mute to prevent any background noise and after the speaker's remarks there will be a question and answer session. If you would like to ask a question during that time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you. And I would now like to turn the conference over to Aaron Turner, head of investor relations. You may begin.

Great. Thank you, Abby. Good afternoon and welcome everyone to Smartsheet's first quarter of fiscal year 2025 earnings call. We will be discussing the results announced in our press release issued after the market closed today. With me today are Smartsheet CEO Mark Mader and our CFO Pete Godbull. Today's call is being webcast and will also be available for replay on our investor relations website at investors.smartsheet.com. There's a slide presentation that accompanies Pete's prepared remarks, which can be viewed in the event section of our investor relations website. During this call, we will make forward-looking statements within the meaning of the federal securities laws. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends. These forward-looking statements are subject to a number of and other factors including, but not limited to, those described in our SEC filings available on our investor relations website and on the SEC website at www.sec.gov. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our actual results may differ materially and or adversely. All forward-looking statements made during this call are based on information available to us as of today and we do not assume any obligation to update these statements as a result of new information or future events except as required by law. In addition to the U.S. GAAP financials, we will discuss certain non-GAAP financial measures. A reconciliation to the most directly comparable U.S. GAAP measures is available in the presentation that accompanies this call, which can also be found on our Investor Relations website. With that, let me turn the call over to Mark.

Thank you, Aaron, and good afternoon, everyone. Welcome to our first quarter earnings call for fiscal year 2025. Q1 finished strong and reflected steady improvement as we moved through the quarter. In the quarter, 53 customers expanded their Smartsheet ARR by more than $100,000. We now have 72 customers with ARR over $1 million, up 50% from Q1 last year. We ended the quarter with annualized recurring revenue of $1.056 billion and more than 14.7 million Smartsheet users. In Q1, we expanded with customers including Nestle Purina, Ross Stores, and Sephora, among others. We saw a significant expansion with a global media and entertainment company that has experienced growing demand for Smartsheet within its employee base. This expansion is across multiple dimensions, the number of users, geographically from their core U.S. group to teams in Hong Kong, Singapore, and other international markets, and usage across our breadth of premium capabilities. Over the last year, in order to manage the expanding scale of their workloads on Smartsheet, the company's use of data shuttle has doubled, and the use of dynamic view to manage confidential information within the organization has tripled. In EMEA, a technology and consumer electronics company signed a large three-year enterprise deal. They were in need of a high-scale data asset management solution to replace a tool built by their agency partners that couldn't meet the growing demands of their business. They saw the value of brand folder within Smartsheet's workflows and the security, flexibility, and power of this integrated content platform. The company will store millions of brand assets for distribution to their subsidiaries around the world. Going forward, they plan to build out a larger marketing and creative management ecosystem using Smartsheet. This past quarter, we saw a significant expansion that included an upgrade to Advanced Platinum at a major business process service provider. Because much of their work involves providing support to government agencies, our advanced security offering, Smartsheets Safeguard, was key to the deal. Furthermore, Data Shuttle and Data Mesh are crucial to maintaining consistency and standardization of data across their client projects, showcasing the power of Smartsheets enterprise interoperability. The company sees their IT portfolio management solutions, which are built on Smartsheet, as a competitive advantage and are driving value by leveraging our premium capabilities. In Q1, we also entered into a collaboration with KPMG, a longstanding Smartsheet customer who wanted to leverage Smartsheet to enhance their client delivery experience. To support this objective, we teamed with KPMG to develop a globally available standardized service delivery solution to track and manage value realization on strategic business transformation projects. As businesses today are under more and more pressure than ever to deliver better lasting results for stakeholders, Smartsheet enables KPMG and its clients to efficiently track and capture value with real-time collaboration and communication on complex projects. This solution enables Smartsheet to establish deeper engagement within new and existing enterprises as our platform is utilized by the customer going forward. To unlock greater value for our customers in Smartsheet, I am pleased to share that on June 24th, we will be rolling out a new pricing and packaging model. We anticipate it being modestly accretive in the near term and meaningfully accretive in the longer term. The new model provides broader access to Smartsheet features to more users and organizations who will be able to access the entire feature set offered by a plan, while providing increased control and greater transparency to administrators. In aggregate, the new model pairs a greater number of licensed users with a lower price per user on business and enterprise plans. New customers will onboard with this model starting on June 24th, while existing annual customers will transition in calendar year 2025. We anticipate this new pricing and packaging model will be foundational for our long-term durable growth. A key highlight of this change is shifting from a paid creator and free collaborator model in which editors, referred to as members, are licensed. Users external to an organization, referred to as guests, and internal viewers will continue to access Smartsheet at no cost. The first to do so in the category, Smartsheet will launch provisional member access, which enables people within an organization for a limited time to create and contribute to workflows prior to being added to the subscription. This will drive increased virality by enabling organizations to make available to employees the full breadth of the platform in a low-friction manner while allowing system admins to manage their users more effectively. While existing customers will transition to the new subscription model with their renewal dates in 2025, we anticipate demand from some organizations wanting to benefit from the new subscription model sooner, and we will accommodate them as appropriate. More information on the near and long-term financial benefit to incremental bookings will be shared as we onboard new customers and as existing customers convert to the new model. We continue to see meaningful adoption of our AI tools as they empower teams to unlock actionable insights from the data stored in the platform. Since Smartsheet AI's GA launch in February, nearly half of our enterprise customer plans have used Smartsheet AI to generate business logic and content with simple, plain language prompts. In May, we released the next element of Smartsheet AI, Analyze Data, an AI tool that enables users to inquire and get insights from their data more quickly. Rather than creating custom reports and dashboards, users can get results in seconds, reducing manual work associated with complex data analysis. This type of data analysis is a common need for customers, and GenAI is significantly reducing complexity. Teams can easily track KPIs, make data-driven decisions, and unblock work. Our vision to bring applied AI to every business worker within the enterprise extends these capabilities to unlock insight across portfolios and align the right people with the right work. A GenAI powered build assistant will co-create powerful solutions to business challenges so any user can be a power user. FY25 marks a pivotal year for our platform as we unveil a comprehensive modernization of Smartsheet's look and feel. This has been a multi-year investment. In April 2024, we launched our Timeline View, which is generally available to all users on business and enterprise plans. Timeline View offers a modern approach to visualizing and interacting with information stored in Smartsheet. Users can organize work on a horizontal timeline to track progress, communicate status, and collaborate in real time with stakeholders in a highly visual way. We're pleased to announce that in July, we will launch Board View, our all-new solution for agile work management. BoardView is a Kanban solution that provides teams with superior visibility into the progress of work and organization of assets. Looking further ahead, we'll launch our new table view by the fall of 2024. This user-friendly experience is designed to be the new hub for project, task, and data management. Both board and table views are the modern successors to our existing views. With an innovative, more intuitive UI, and category-leading scalability and performance, we believe that timeline, board, and table views will represent a huge win for customers. On the client engagement front three weeks ago, we hosted our inaugural EMEA Engage Customer Conference in London, during which two customers played a very visible role in our keynote, the International Olympic Committee and Bayer Crop Sciences. As the International Olympic Committee shared and engaged London, They are using Smartsheet to organize the 2024 Paris Summer Olympics, one of the world's most significant live events. Smartsheet has become their single source of truth, streamlining workflows and enabling deeper connection between their teams. Cross-functional sharing is allowing them to onboard their suppliers to Smartsheet so they can use our platform to drive key work efforts. Bayer CropSciences adopted Smartsheet to help unify its global teams to one centralized work management platform. Smartsheet has enabled Bayer to enhance collaboration and break down silos by giving everyone real-time visibility into the data they need. We're proud to help enable Bayer's stated cultural shift towards shared ownership. And in our engaged press release, we highlighted Amazon as a customer. For over a decade, teams across Amazon have been using Smartsheet to manage their work at scale. For example, the AWS Worldwide Public Sector team uses Smartsheet's business PMO capabilities to standardize processes and create a central source of information. Previously, their data had been spread across several tools, making it difficult to measure the impact of the team's work. Team members now enter data in one place and it automatically rolls up to Smartsheet dashboards that leaders have visibility into. Smartsheet is helping drive consistency, productivity, and collaboration across the team. It's also creating better visibility into team members' workloads. In closing, The continued evidence of success within the enterprise with the convergence of new product innovations, the upcoming launch of our next-gen pricing and packaging model, and a reinvigorated go-to-market strategy solidifies our conviction around our capacity for long-term durable growth. Now let me turn the call over to Pete.