Smartsheet revenue outlook misses estimates, stock sinks

FILE PHOTO: Smartsheet Inc. President and CEO Mark Mader attends his company's IPO on the floor of the NYSE in New York

(Reuters) - Smartsheet on Thursday provided a revenue outlook that missed analyst estimates, sending its stock down 10%, even after the cloud software seller's quarterly revenue exceeded estimates.

WHY IT’S IMPORTANT

Smartsheet's quarterly results provide fresh evidence of tepid spending on cloud software following recent weak forecasts from Salesforce and Snowflake.

CONTEXT

The outlook for richly-valued cloud companies has become more uncertain after Salesforce and Snowflake on Feb. 28 signaled a slowdown in tech spending as customers grapple with an uncertain economy.

Also late on Thursday, Photoshop software maker Adobe forecast quarterly revenue below analysts' estimates, sending its stock down almost 10%.

BY THE NUMBERS

Smartsheet reported quarterly revenue up 21% to $256.9 million, exceeding the average analyst estimate of $255.4 million, according to LSEG.

For its current quarter, the company said it expects revenue between $257 million and $259 million. That compares to the consensus estimate of $263.6 million.

MARKET REACTION

Smartsheet's stock dropped 10% in extended trade following the report. During Thursday's session, the stock fell 2.3%, bringing its year-to-date loss to almost 16%.

(Reporting by Noel Randewich, editing by Deepa Babington)