Smartsheet Inc. (NYSE:SMAR) Q4 2023 Earnings Call Transcript

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Mark Mader: Hi, Terry. The 3,300, again that ties out to be large enterprise. It’s over 10,000 employees. We obviously have many more companies, north of 2000 employees as well. So net, very large segment. It is still really early innings for Advance. We have — while the bookings do tie-up to a lot of the larger transactions we have, it’s a minority of that base. So we think it’s still — we are trying to figure out ways in addition to our people-based processes to get these capabilities presented the people. As I’ve said on past calls, on some of our roadshows, we are working on both, getting our professional sales team able to solution advice and do outcome mapping with people, while getting our Advanced product line into a self-discovered state.

So what that means is, people at those 3,300 customers using our product in the context of what they’re trying to solve, whether its integration, whether it’s providing Advance access to data, having those things presented to them in the full or having them experienced those things and then do really have inbound demand to us saying, hi, we use this thing. We’d like to talk to you about this capability, which ultimately leads to a discussion of Advance. So we are still, call it, second inning on the Advance penetration as it relates to these super large customers. What needs though is that, we have enough data points now that really helps us understand how people are adopting those? What it means for connected users and how that flows through on the economics?

Pete Godbole: And, Terry, the second part of your question is that, was under 23% to 24% revenue growth and how that parses this out across segment? So our revenue growth is a function of our billings and our net dollar retention rates, you think of the largest customers, they grow with us the fastest as we — as Mark shared on our biggest large enterprise customers, you can see the growth rate is really quick. And the best part about that is they grow — they will grow faster than our medium-term growth rate. But what’s interesting is, our biggest customers are the most profitable for us as well. That’s the scale that leads to the $110 million you see which you referenced at the start. So we’re pretty excited by those economics.

Terry Tillman: Yes, got it. And I guess just following-up on the first part of the question. I mean, Mark, you were kind of going down the path of product discovery and I know we’ve talked about that a bunch in the past. You go on the website and if you just look at the sheer number of capability, While these books probably don’t even know all of what is under the hood, but is there a point in time this year where there is a major kind of milestone where — whether it’s the technology or AI or people, they could really unleash this where potentially this could become an upside driver around some of the product discovery initiatives on whether it’s billings or revenue. Thank you.

Mark Mader: Yes, Terry, we expect to benefit from this beginning in the second-half. So Engineering is underway right now. Some of that self-discovery will be available heading into the second-half. And consistent with how Pete and I have forecasted the business, until a new idea, new concept, the new innovation yields, we don’t make it into our guide. So, I would see that Terry, if it performs to be incremental

Terry Tillman: That’s great. Thank you.

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