Smartsheet Inc at William Blair Growth Stock Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Mark, maybe it's best to just start off with -- for those that are not familiar, start off with a quick overview of Smartsheet, what the platform does and the problem that you're trying to solve for customers.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. Yes, absolutely. No, that was a great overview, and we'll get into the net dollar retention rate figure. I think that's been one of the highlights of the story since being IPO. But let's maybe take a higher look view at the market today, this market of being collaborative work management. So when you look at it, where do you think we are in terms of the adoption curve today? And when you're going out to market and talking to customers, do you find that this opportunity is still largely greenfield today? Or are you starting to get more into kind of rip and replace type engagements where you're displacing maybe some other solutions that customers have adopted previously?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. And I think one of the other compelling parts of the value proposition and the solution itself is this idea of no-code automation, which I think is a very powerful feature inside Smartsheet. And when I think about automation, I think it means different things to different people, right? You can range from RPA to sales force automation to VPN. So maybe put that in Smartsheet's context and what automation means for Smartsheet customers and then the role that you're seeing in play in customer conversations when you try to differentiate yourself from other vendors in the market?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. And that's interesting because what you're talking about there is your kind of user mindset, but the product right now, as I understand it, is at a different level, where you have some functionality available that you can integrate into ERP, you can integrate into CRM, you have these connectors that do enable you to do this cross-system workflow, right? And maybe it'd be interesting to see where your advanced customers are on that front and how they're utilizing some of those -- some of those functionalities. Because as we look ahead, right, I think that's going to be -- that seems like it's going to be a big driver of stickiness and utilization that you are crossing to go after.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. And it's interesting. We've definitely seen that land-and-expand motion play out. I think that's what you alluded to earlier with the net dollar retention rates, where they have stayed at this sustainably high level. But maybe quickly to just put a bow on the automation conversation. I think one of the hot topics for investors, it has been RPA, right? And you're talking about the orchestration layer and how strategic that is right now. But how do you view the robotic process automation space internally? Is that a something that's complementary to Smartsheet? Or do you view that as a competitive application that does similar types of automation that you do?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. Yes, that makes a lot of sense. Let's turn to the (inaudible) expansion, and this land-and-expand motion that we've been talking about a little bit. How -- one of the highlights, I think, of the Smartsheet story has been this high 130-plus percent net dollar retention rate pretty much since the IPO. When you think about the drivers behind that and what's in your control, how much of it do you see is adoption of additional modules, right, whether it be accelerators or some of your premium solutions versus the network effects that are kind of inherent in Smartsheet, where it's a collaborative platform? So one team uses it. It spreads to another team. Just walk through those dynamics a little bit and what's driving that net dollar retention rate. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2020 / 7:00PM, SMAR.N - Smartsheet Inc at William Blair Growth Stock Conference

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. And I think you mentioned it last -- on the earnings call last quarter, too, that, that kind of that free user base has increased pretty dramatically since the -- since last quarter and since the time of the IPO. And if I -- if I'm thinking about it kind of critically, it's still a pretty large top-of-funnel opportunity for you that exists that you can convert these nonpaying organizations to pay it over time as just a way of maybe not arbitrarily putting in paywalls for them to get them successful. And that kind of brings me to my next question a little bit. When you're -- you have -- you obviously had a direct go-to-market sales effort. When you're thinking about what you're prioritizing, how do you think about new logo growth between what that sales org is focusing on versus upselling and expanding usage within existing customers?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. Yes, absolutely. And there's kind of -- I think there's been a proliferation of tools out there, and you seem to be most focused on the enterprise and scaling with existing customers. But talk about the competitive environment a little bit and how you differentiate from -- there's larger vendors out there, there's Microsoft, there's Google and there's a handful of private vendors as well. What is the key kind of -- what are some of the key Smartsheet capabilities that are key differentiators for you when you go out and win customers, when you land and then when you decide -- when customers ultimately decide that, "Oh, Smartsheet is one of the tools that I want to have available to my employees enterprise-wide." What are those critical elements there?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. Let's transition to the current environment right now. I think it's fair to say that it's a very unique environment and that -- one that no business is immune from. There's a lot of uncertainty out there. So when you're looking at your business, what are some of the operational changes that you've made from a go-to-market perspective to adjust to this environment? And then second, how has the demand signal that you're receiving from the customers right now changing as a result of work from home and distributed workforces?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. Well, that's a good place to leave it as any, and we're up on time here. But, Mark, it was a pleasure. Thank you for joining us. And hopefully, we'll see each other again soon in person.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Bye. Take care.