The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst
: Great quarter. Maybe, Mark, just building off that last comment on Smartsheet Advance. Just given the momentum with larger
customers, maybe a slight shift towards kind of more strategic bundled sales, do you see the composition of your sales force changing
at all, who you're hiring? Just curious how you feel like you're staffed to take on that kind of selling.
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JUNE 02, 2021 / 8:30PM, SMAR.N - Q1 2022 Smartsheet Inc Earnings Call
Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst
: Yes. Makes sense. And maybe I could follow up with just a very big picture question. So look, obviously, there's another vendor in
the space going through an IPO process now. I think a lot of investors are contemplating competitive differentiation in the space.
And you've hit on some of this. But since it's a conversation I'm having a lot, maybe I could just throw it to you, like what would you
highlight as kind of the 2 or 3 key areas where you think Smartsheet is really differentiated in the market?
Question: Rishi Nitya Jaluria - RBC Capital Markets, Research Division - Analyst
: First, I wanted to start with going back to large customers. And again, Mark, very impressive list of new logos and expansions. Pete,
last quarter, you gave us some really interesting data points on the penetration rates and opportunity within large customers. And
I think you talked 10k-plus employees. Obviously, won't ask for an update on that every quarter. But can you maybe give us a sense
for what progress you're starting to see with some of the initiatives that you laid out last quarter to grow the opportunity within
those customers? And then I've got a follow-up.
Question: Rishi Nitya Jaluria - RBC Capital Markets, Research Division - Analyst
: Got it. Got it. That's helpful. And then wanted to go to just a comment that was in the deck, which is around the ramping head count
in services. Putting margin implications aside, can you maybe talk a little bit about where the -- I guess what's driving that increase
in services head count? Are there certain areas that you want to focus on? Or is this primarily just services? Or it was running hot and
you're trying to get it back to a normal level?
Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst
: Congrats on the quarter. Mark, I wanted to ask about WorkApps a little bit. I think you gave some pretty impressive adoption metrics
last quarter. And in light of the enterprise strength that you're now starting to see, I would just be curious to know if this is playing
a role in the conversation with your enterprise customers at all. Is it still too early to tell? And then how should we just think about
the monetization that might result from WorkApps adoption?
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JUNE 02, 2021 / 8:30PM, SMAR.N - Q1 2022 Smartsheet Inc Earnings Call
Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst
: Perfect. That's very helpful. And then if I can follow up on Rishi's question around the services business. Obviously, as you go deeper
into the enterprise with WorkApps and Advance and a lot of these more sophisticated capabilities that you're building, I'd just be
curious how you think the role of your partners changes over time. And would love to hear just where you are today in developing
that partner ecosystem, especially for those larger enterprise customers that may want some more consultative services as they
deploy Smartsheet.
Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst
: Perfect. Congrats again.
Question: Brett Anthony Knoblauch - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: Maybe on the margin front, and I guess it kind of goes to the revenue mix. How should we think about that panning out for the rest
of the year? Should we assume services growth at a similar level to what we saw in this quarter and maybe reinvest incremental
gross profits from higher subscription gross margins in the business?
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