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

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

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

Smartsheet Inc. (NYSE:SMAR), the enterprise platform for modern work management, today announced financial results for its second fiscal 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 fiscal 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 total revenue, in the second quarter of fiscal 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 fiscal 2023. GAAP net loss per share was $(0.25), compared to GAAP net loss per share of $(0.48) in the second quarter of fiscal 2023. Non-GAAP net income was $22.0 million, compared to non-GAAP net loss of $(13.5) million in the second quarter of fiscal 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 fiscal 2023.

Cash Flow: Net operating cash flow was $48.5 million, compared to $10.2 million in the second quarter of fiscal 2023. Free cash flow was $45.5 million, or 19% of total revenue, compared to $7.1 million, or 4% of total revenue, in the second quarter of fiscal 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 and help them quickly build sophisticated solutions
Strengthened Smartsheet's enterprise platform scale and performance systems with computational feature 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 market¹
Recognized as a vendor who shaped the collaboration applications market in 2022 in IDC's Worldwide Collaborative Applications Market Shares, 2022: The Rise of the Multiplayer Enterprise report²

The section titled "Use of Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures with a reconciliation between GAAP and non-GAAP information. The section titled "Definitions of Business Metrics" contains definitions of certain non-financial metrics provided within this earnings release.

Financial Outlook

For the third quarter of fiscal 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 fiscal 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 flow of $120 million

We have not reconciled free cash flow 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 flow, due to the uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items will have a significant impact on our free cash flow. Accordingly, a reconciliation of net cash from operating activities to free cash flow guidance is not available without unreasonable effort. 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 affiliates. 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 affiliates. 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 fitness 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. Pacific 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 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) 362-9199 (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 fiscal quarter ending October 31, 2023, and the full fiscal 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 financial or operating performance. Forward-looking statements include all statements that are not historical facts and can be identified 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 different 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 benefits of, potential acquisitions; and our international expansion strategies. Further information on risks that could cause actual results to differ materially from forecasted results is included in our filings with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended July 31, 2023 to be filed 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 differ materially from those anticipated in the forward-looking statements.

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial 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 financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found in the accompanying financial statements included with this press release.

We believe that these non-GAAP financial measures provide useful information about our financial 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 financial and operational decision-making. We are presenting these non-GAAP financial metrics to assist investors in seeing our financial 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 financial performance over multiple periods with other companies in our industry.

We define 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 define 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 define basic non-GAAP net income (loss) per share as non-GAAP net income (loss) divided by weighted-average shares outstanding ("WASO"). We define 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 significant recurring expense in our business and an important part of our compensation strategy.

We use the non-GAAP financial measure of free cash flow, which is defined as GAAP net cash flows from operating activities, reduced by cash used for purchases of property and equipment (inclusive of spend on internal-use software). We believe free cash flow 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 flow 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 growth. There are a number of limitations related to the use of free cash flow as compared to net cash from operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

We define 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.

Definitions of Business Metrics

Average ACV per domain-based customer

We define 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 define 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 affect 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. Visit www.smartsheet.com to learn more.

Disclosure of Material Information

Smartsheet announces material information to its investors using SEC filings, press releases, public conference calls, and on its investor relations page of the company's website at https://investors.smartsheet.com.

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
Subscription	$	221,522		$	173,533		$	427,523		$	328,809
Professional services		14,063			13,158			27,948			26,192
Total revenue		235,585			186,691			455,471			355,001
Cost of revenue
Subscription		33,584			27,722			66,751			52,860
Professional services		13,454			12,829			26,168			24,849
Total cost of revenue		47,038			40,551			92,919			77,709
Gross profit		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
General and administrative		36,523			33,200			71,501			66,244
Total operating expenses		224,694			210,999			430,814			411,953
Loss from operations		(36,147	)		(64,859	)		(68,262	)		(134,661	)
Interest income		5,847			1,281			11,064			1,669
Other income (expense), net		(55	)		1,624			(591	)		796
Loss before income tax provision		(30,355	)		(61,954	)		(57,789	)		(132,196	)
Income tax provision		3,002			359			5,438			574
Net loss	$	(33,357	)	$	(62,313	)	$	(63,227	)	$	(132,770	)
Net loss per share, basic and diluted	$	(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
Cost of subscription revenue	$	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
General and administrative		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)

	July 31, 2023			January 31, 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
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 benefits		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 deficit		(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 flows 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 benefits		(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 flows 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 flows from financing 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 financing activities		10,766			8,972
Effects 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			—
Non-GAAP operating income (loss)	$	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			—
Non-GAAP net income (loss)	$	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. 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
Effect of dilutive securities:
Shares subject to outstanding common stock awards	3,541	—	3,864	—
Non-GAAP weighted-average shares outstanding; diluted	137,370	129,645	137,060	129,091

Reconciliation from net operating cash flow to free cash flow

	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	)
Free cash flow	$	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:
Deferred revenue (beginning of period)		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
Lease restructuring costs⁽³⁾		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) 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
Lease restructuring costs⁽³⁾		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.

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Smartsheet Inc. Announces Second Quarter Fiscal Year 2024 Results